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NATION'S MANPOWER REVOLUTION

4 NATIONAL COMMISSION ON AUTOMATION AND-

, 4, )11Z- TECHNOLOGICAL PROGRES oviRsi

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P-i: 10

HEARINGS

BEFORE THE

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EMPLOYMENT AND MANPOWER

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COMMITTEE ON

B011, AND PUBLIC WELFARE

UNITED STATES SENATE

EIGHTY-EIGHTH CONGRESS

SECOND SESSION

ON

S.J. Res. 105, S. 2298, S. 2427, and S. 2623

PART 10

JULY 6, 1964

Printed for the use of the

Committee on Labor and Public Welfare

U.S. GOVERNMENT PRINTING OFFICE

35-3880 WASHINGTON: 1964
COMMITTEE ON LABOR AND PUBLIC WELFARE

LISTER HILL,

PAT McNAMARA, Michigan

WAYNE MORSE, Oregon

RALPH W. YARBOROUGH, Texas

JOSEPH S. CLARK, Pennsylvania

JENNINGS RANDOLPH, West Virginia

HARRISON A. WILLIAMS, JR., New Jersey

CLAIBORNE PELL, Rhode Island

EDWARD M. KENNEDY, Massachusetts

LEE METCALF, Montana

Alabama, Chair man

BARRY GOLDWATER, Arizona

JACOB K. JAVITS, New York

WINSTON L. PROUTY, Vermont

JOHN G. TOWER, Texas

LEN B. JORDAN, Idaho

STEWART E. MCCLURE, Chief Clerk

JOHN S. FORSYTHE, General Counsel

SUBCOMMITTEE ON EMPLOYMENT AND MANPOWER

JOSEPH S. CLARK, Pennsylvania, Chairman

JENNINGS RANDOLPH, West Virginia

PAT McNAMARA, Michigan

CLAIBORNE PELL, Rhode Island

EDWARD M. KENNEDY, Massachusetts

LEE METCALF, Montana

II

WINSTON L. PROUTY, Vermont

LEN B. JORDAN, Idaho

JACOB K. JAVITS, New York

EDWARD D. FRIEDMAN, Counsel

FRAZIER KELLOGG, Professional Staff Member

MICHAEL J. BERNSTEIN, Minority Counsel

*
CONTENTS

Text of: Page

Senate Joint Resolution 105 3350

S. 2298 3357

S. 2427 3365

S. 2623 3374

Reports from the:

Office of Science and Technology, August 12, 1963 3380

Bureau of the Budget, June 12, 1964 3380

Office of Science and Technology, June 15, 1964 3381

Council of Economic Advisers, June 16, 1964 3382

National Aeronautics and Space Administration, June 23,

1964 3383

Department of Defense, June 26, 1964 3384

Department of Health, Education, and Welfare, June 26,

1964 3384

Department of Agriculture, June 30, 1964 3385

Atomic Energy Commission, June 30, 1964 3386

Department of Labor, July 2, 1964 3386

Department of Commerce, July 7, 1964 3388

CHRONOLOGICAL LIST OF WITNESSES

Hodges, Hon. Luther H., Secretary of Commerce, accompanied by Robert

E. Giles, General Counsel, and Richard H. Holton, Assistant Secretary

for Economic Affairs 3388

Wirtz, Hon. W. Willard, Secretary of Labor, accompanied by Edith N.

Cook, Associate Solicitor, and Leon Greenberg, Assistant Commissioner

for Productivity and Technological Development, Bureau of Labor

Statistics 3400

STATEMENTS

Greenberg, Leon, Assistant Commissioner for Productivity and Technological Developments, prepared statement 3500

Hodges, Hon. Luther H., Secretary of Commerce, accompanied by Robert

E. Giles, General Counsel, and Richard H. Holton, Assistant Secretary

for Economic Affairs 3388

Prepared statement 3389

Seligman, Ben B., director, Department of Education and Research,

Retail Clerks International Association, AFL—CIO, supplemental statement 3429

Wirtz, Hon. W. Willard, Secretary of Labor, accompanied by Edith N.

Cook, Assotiate Solicitor, and Leon Greenberg, Assistant Commissioner

for Productivity and Technological Development, Bureau of Labor

Statistics 3400

ADDITIONAL INFORMATION

Automation and Its Impact: Selected References, by Mary R. Heslet,

Economics Division, Legislative Reference Service, Library of Congress__ 3494

Articles entitled:

"Automation in a Wisconsin Community," by John Newhouse, staff

writer, Wisconsin State Journal, Madison, Wis 3439

"New Trends in Productivity Motivation," by J. J. Jehring, codirector, School of Commerce, University of Wisconsin, Madison, Wis_ _ 3434

"Productivity, Changing Technology, and Employment," from the

Manpower Report of the President, March 1964 3476

III

•
IV CONTENTS

Letters from: Page

Biemiller, Andrew J., director, Department of Legislation, AFL—CIO,

to Senator Clark, dated July 7, 1964, containing statement of AFL—

CIO Executive Council 3423

Giles, Robert E., General Counsel, Department of Commerce, to

Senator Clark, dated July 9, 1964 3395

Gordon, Kermit, Director, Bureau of the Budget, to Senator Randolph,

dated February 13, 1964, containing information requested 3398

Hicks, J. Howard. secretary-treasurer, Office Employees International

Union, to Senator Clark, dated July 1, 1964 3425

Randolph, Hon. Jennings, a U.S. Senator from the State of West

Virginia, to Kermit Gordon, dated March 2, 1964 3399

Rice, Theron J., legislative general manager, Chamber of Commerce

of the United States, to Senator Clark, dated June 29, 1964 3424

Wirtz, Hon. W. Willard, Secretary of Labor, to Senator Clark, dated

July 8, 1964 3412

Letters to Mr. Edward D. Friedman, counsel, Subcommittee on Employment and Manpower, from:

Benoit, Emile, Columbia University, New York City, dated June 4,

1964 3429

Chamberlain, Neil W., professor of economics, Yale University, New

Haven, Conn., dated June 15, 1964 3426

Diebold, John, the Diebold Group, Inc., New York City, dated

June 22, 1964 3428

Hayes, A. J., international president, International Association of

Machinists, dated June 9, 1964 3425

Horner, H. M., chairman, United Aircraft, East Hartford, Conn.,

dated June 9, 1964 3426

Jehring, J. J., codirector, School of Commerce, University of Wisconsin, dated June 5, 1964 3434

Williams, Lawrence K., assistant professor, New York State School

of Industrial and Labor Relations, Cornell University, Ithaca,

N.Y., dated June 11, 1964 3427

Report from the President's Advisory Committee on Labor-Management

Policy, entitled "The Benefits and Problems Incident to Automation

and Other Technological Advances" 3413
NATION'S MANPOWER REVOLUTION

National Commission on Automation and

Technological Progress

MONDAY, JULY 6, 1964

U.S. SENATE,

SUBCOMMITTEE ON EMPLOYMENT AND MANPOWER

OF THE COMMITTEE ON LABOR AND PUBLIC WELFARE,

Washington, D.C.

The subcommittee met at 10:40 a.m., pursuant to call, in room

4232, New Senate Office Building, Senator Joseph S. Clark, chairman

of the subcommittee, presiding.

Present: Senators Clark (presiding) and Randolph.

Committee staff members present: Stewart E. McClure, chief clerk;

Edward D. Friedman, counsel; Frazier Kellogg, professional staff

member, of the subcommittee; and Michael J. Bernstein, minority

counsel.

Senator CLARK. The subcommittee will be in session. We are

meeting this morning to take testimony from the Secretary of Commerce and the Secretary of Labor, on S. 2298, Senate Joint Resolution

105, and S. 2427, introduced by Senator Humphrey for himself and

several other Senators, including me, on January 15, 1964, and on

S. 2623, introduced on March 10 by Senator Hart, of Michigan,

for himself and several other Senators, including Senator Randolph

and myself.

This is a bill to establish a National Commission on Automation and

Technological Progress.

The committee has already heard some 26 witnesses in this same

general legislative area, testifying largely on Senate Joint Resolution

105, introduced on July 25, 1963, by Senator Javits for himself and a

number of other Senators, including Senator Randolph and me, and

S. 2298, introduced on November 8, 1963, by Senator Hart for himself,

Senator Humphrey, and me.

What we hope to do is to distill from the wisdom I am sure we will

receive this morning from Secretaries Hodges and Wirtz, the proper

kind of a bill for the subcommittee to recommend to the full committee

dealing with the whole problem of the creation of a commission of some

sort to deal with automation, technological progress, the application

of technology to community and manpower needs, automation technology and employment, including, I would hope, some consideration

of the potential impact of possible disarmament on employment,

manpower, and the defense effort.

(The bills primarily referred to and departmental reports follow:)

3349
3350 NATION' S MANPOWER REVOLUTION

88TH CONGRESS S

1ST SESSION . J. RES. 105

IN THE SENATE OF THE UNITED STATES

JULY 25, 1963

Mr. JAVITS (for himself, Mr. CLARK, Mr. COOPER, Mr. DOUGLAS, Mr. FONG, Mr.

INOUYE, Mr. LONG Of Missouri, Mr. MORSE, and Mr. RANDOLPH) introduced

the following joint resolution; which was read twice and referred to the

Committee on Labor and Public Welfare

JOINT RESOLUTION

To authorize appointment of a Presidential Commission on

Automation.

1 Resolved by the Senate and House of Representatives

2 of the United States of America in Congress assembled,

3 That Congress hereby finds that technological change and

4 economic adjustment are essential to the advancement of na5 tional prosperity and power, but that the associated readjust6 ment of workers displaced by automation, industrial reloca7 tion, shifts in market demand, and other factors of economic

8 change, is a major problem facing the Nation, particularly

9 in view of the current level of general unemployment. The

10 Congress declares that a wise and timely solution of these
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problems can benefit the entire Nation through increased

output and productivity and the avoidance of hardship to

individual workers. It can also make a decisive contribution to other major economic problems facing the Nation,

including underutilization and obsolescence of production

facilities and increased labor management friction. The Congress further declares that a variety of means to insure increased productivity while lessening the impact of job displacement upon the individual worker, including measures

designed to raise the general level of employment, as well

as retraining, relocation, early retirement, improved rehiring

and employment services, and interim compensation during

unemployment, must be explored and are a responsibility of

industry, and where necessary also of Government, and require recognition of the fact that measures which promote

speedier and more equitable worker adjustment to economic

17 change also increase national productivity, income, and

18 wealth.

19 PRESIDENTIAL COMMISSION ON AUTOMATION AND

20 EMPLOYMENT

21 SEC. 2. (a) The President of the United States is here22 by authorized to appoint a Presidential Commission on Auto23 mation and Employment (hereinafter referred to as the

24 "Commission") , which shall be composed of twenty-five

25 members as follows:
3352 NATION'S MANPOWER REVOLUTION

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1 (1) Five members who shall be representative of in2 dustry and commerce in large and small business and in

3 various industries;

4 (2) Five members who shall be representative of labor

5 organizations in various occupations and industries;

6 (3) Two members who are recognized experts in labor7 management relations, at least one of whom shall be from

8 the academic field;

9 (4) Two members who are experts in science and tech10 nology and its economic implications, at least one of whom

11 shall be from the academic field;

12 (5) Six members who shall be representative of the

13 general public, and who shall be selected without regard to

14 any interest or connection they may have with any of, the

15 foregoing areas. The President shall appoint a Chairman

16 from among these public members.

17 (6r) As ex officio members, the Secretary of Agricul18 ture, the Secretary of Commerce, the Secretary of Labor,

19 and the Secretary of Health, Education, and Welfare, the

20 Director of the Office of Science and Technology, and the

21 Chairman of the Council of Economic Advisers.

22 (b) Members of the Commission referred to in para23 graphs (1) to (5) of subsection (a) shall receive compen24 sation at the rate of $100 per diem while performing services

25 for the Commission, and while away from their homes in
NATION'S MANPOWER REVOLUTION 3353

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1 connection with attendance at meetings of the Commission

2 shall be entitled to transportation expenses and per diem in

3 lieu of subsistence at the rate prescribed by, or established

4 pursuant to, section 5 of the Administrative Expenses Act of

5 1946, as amended (5 U.S.C. 73b-2) .

6 (c) The President is authorized to appoint, by and with

7 the advice and consent of the Senate, an Executive Director

8 of the Commission. The Executive Director shall be the

9 principal executive officer of the Commission and shall be

10 paid compensation at the rate of $20,000 per annum. The

11 Commission is authorized to appoint, in accordance with the

12 civil service laws, rules, and regulations, and fix the corn13 pensation in accordance with the Classification Act of 1949,

14 as amended, of such other officers and employees as may be

15 necessary: Provided, That not more than ten officers and

16 employees may be appointed without regard to civil service

17 laws, rules, and regulations, and to let contracts to perform

18 such work as is necessary.

19 (d) With the consent of the heads of other departments

20 and agencies of the Government, the Commission is author21 ized to utilize the personnel, services, and facilities of such

22 departments and agencies in carrying out its functions under

23 this Act. Such departments and agencies shall cooperate

24 with the Commission to the greatest extent practicable for

25 such purpose; and the Commission shall utilize, to the great-
3354 NATION'S MANPOWER REVOLUTION

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1 est extent practicable, data, analyses, and studies furnished

2 by the appropriate Federal agencies and shall give due

3 regard to the findings of major public and private research

4 groups that have studied or concurrently are studying the

5 problem of employment and technological progress.

6 (e) The Commission shall transmit to the President

7 and to the Congress interim reports of its activities unaer

8 this Act at such times as the President or the Commission

9 deems desirable and a final report of its activities under

10 this Act by January 1, 1965.

11 PURPOSE AND FUNCTIONS OF THE COMMISSION

12 SEC. 3. The Commission shall13 (1) make findings with respect to14 (a) the identification and description of the

15 major types of technological and economic changes

16 which are likely to occur during the next ten years,

17 and their effect upon the nature of employment,

18 requirements;

19 (b) the recent and prospective pace of tech

20 nological change, its impact on productivity, its

21 incidence upon particular occupations and groups

22 of workers, and its other effects upon the Nation's

23 economy, communities, families, social structure.

24 and human values.

25 (c) the relationship between the general level
NATION'S MANPOWER REVOLUTION 3355

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1 of unemployment and the particular employment

2 consequence of technological progress, and an iden3 tification of the major conditions for and existing

4 obstacles to the speedy reemployment, or other

5 equitable adjustment, of workers displaced by au6 tomation and other forms of economic change.

7 (2) describe those actions, properly the responsi8 bility of management, labor, and State and local gov9 ernment which can be undertaken to deal with the social

10 and economic problems of individual workers and man11 agement personnel adversely affected by technological

12 and economic change; and

13 (3) make recommendations to the President and

14 the Congress of the kind of administrative and legisla15 tive measures which will fulfill the proper responsibility

16 of the Federal Government to identify in advance the

17 prospective technological and economic changes and to

18 prevent or alleviate the hardships associated with job

19 displacement, and to share the costs of technological and

20 economic change in such a way as to assure the con21 tinued advance of the Nation's technology and produc22 tivity and the continued well-being of the Nation's

23 people.
3356 NATION'S MANPOWER REVOLUTION

1 APPROPRIATIONS

2 SEC. 4. There are hereby authorized to be appropriated

3 such sums as may be necessary to carry out the purposes of

4 this Act.
NATION'S MANPOWER REVOLUTION 3357

88TH CONGRESS

1ST SESSION S. 2298

IN THE SENATE OF THE UNITED STATES

NOVEMBER 8 (legislative day, OCTOBER 22), 1963

Mr. HART (for himself, Mr. HUMPHREY, and MT. CLARK) introduced the following bill; which was read twice and referred to the Committee on

Labor and Public Welfare

A BILL

To establish a Commission on the Application of Technology

to Community and Manpower Needs, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 That it is hereby declared to be the policy of Congress to

4 promote the application of recent technological advances to

5 meeting large-scale human, community, industrial, and man6 power needs of this Nation. Such an objective can be most

7 effectively achieved by8 (a) determining the impact fuller utilization of

9 new technologies will have on future manpower require10 ments of the labor force;
3358 NATION'S MANPOWER REVOLUTION

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1 (b) defining those areas of unmet community and

2 human needs where application of new technologies

3 might most effectively be directed;

4 (c) examining technological developments that

5 have occurred in recent years, particularly those result6 ing from the Federal Government research and develop7 ment programs, with a view to discovering those areas

8 potentially most promising for civilian and industrial

9 exploitations;

10 (d) reporting on ways by which civilian research

11 and development, together with uses of existing tech12 nology, can more effectively be directed in areas where

13 major social and economic benefits may be achieved;

14 (e) recommending proper relationship between

15 governmental and private investment in the application

16 of new technologies to large-scale human and corn17 munity needs;

18 (f) analyzing the balance and impact among do19 mestic industry to see how the benefits from expenditure

20 of Federal funds may accrue to a wider segment of such

21 industry;

22 (g) defining proper responsibility and organiza23 tion of agencies in the executive branch to achieving

24 these objectives; and

25 (h) recommending ways in which the legislative
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branch of the Government can be better staffed to fulfill the objectives of this policy.

ESTABLISHMENT OF THE COMMISSION ON THE APPLICATION OF NEW TECHNOLOGY TO COMMUNITY AND MANPOWER NERDS

SEC. 2. (a) For the purpose of carrying out the policy

set forth in the first section of this Act, there is hereby established a commission to be known as the Commission on the

Application of New Technology to Community and Manpower Needs (referred to hereinafter as the "Commission").

(b) The Commission shall be composed of fourteen members as follows:

(1) Eight appointed by the President of the United

States, four from the constituent Federal agencies belonging

to the Federal Council for Science and Technology, and four

from private life who have had distinguished careers in labor,

industry, local government, or higher education;

(2) Two appointed by the President of the Senate from

Members of the Senate;

(3) Two appointed by the Speaker of the House of Representatives from Members of the House of Representatives;

and

(4) Two appointed by the President of the National

Academy of Sciences.

(c) Any vacancy in the Commission shall not affect its
3360 NATION'S MANPOWER REVOLUTION

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1 powers, but shall be filled in the same manner in which the

2 original appointment was made.

3 (d) Service of an individual as a member of the Corn4 mission or employment of an individual by the Commission

5 as an attorney or expert in any business or professional field,

6 on part-time or full-time basis, with or without compensation,

7 shall not be considered as service or employment bringing

8 such individual within the provisions of sections 203, 204,

9 205, 207, 208, and 209 of title 18 of the United States Code.

10 (e) The Commission shall elect a Chairman and a Vice

11 Chairman from among its members.

12 (f) Eight members of the Commission shall constitute

13 a quorum.

14 ADVISORY PANEL TO THE COMMISSION ON THE APPLI15 CATION OF NEW TECHNOLOGY TO COMMUNITY AND

16 MANPOWER NEEDS

17 SEC. 3. The Commission may establish an Advisory

18 Panel which shall consist of persons of exceptional corn19 petence and experience in the fields of science and tech20 nology, economics, political science, or operations analysis.

21 Such Advisory Panel members shall be drawn equally from

22 the Government, private industry, and nonprofit educational

23 and technological institutions, and shall be persons available

24 to act as consultants for the Commission.
NATION'S MANPOWER REVOLUTION 3361

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1 COMl'ENSATION OF MEMBEE S OF THE COMMISSION

2 SEC. 4. (a) Members of Congress who are members of

3 the Commission shall serve without compensation in addi4 tion to that received for their services as Members of Con5 gress ; but they shall be reimbursed for travel, subsistence,

6 and other necessary expenses incurred by them in the per7 forniance of the duties vested in the Commission.

8 (b) The members of the Commission who are in the

9 executive branch of the Government shall serve without

10 compensation in addition to that received for their services

11 in the executive branch, but they shall be reimbursed for

12 travel, subsistence, and other necessary expenses incurred

13 by them in the performance of the duties vested in the

14 Commission.

15 (c) The members of the Commission appointed from pri16 vate life shall each receive $75 per diem when engaged in

17 the actual performance of duties vested in the Commission,

18 plus reimbursement for travel, subsistence, and other neces19 sary expenses incurred by them in the performance of such

20 duties.

21 STAFF OF THE COMMISSION

22 SEC. 5. (a) The Commission may appoint and fix the

23 compensation of such personnel as it deems advisable in

35-388 0-64—pt. 10-2
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1 accordance with the provisions of the civil service laws and

2 the Classification Act of 1949.

3 (b) The Commission may procure, without regard to

4 the civil service laws and the classification laws, temporary

5 and intermittent services (including those of members of

6 the Advisory Panel) to the same extent as authorized for

7 the departments by section 15 of the Act of August 2, 1946

8 (60 Stat. 810; 5 U.S.C. 55a) , but at rates not to exceed $75

9 per diem for individuals.

10 DUTIES OF THE COMMISSION

11 SEC. 6. (ii) The Commission shall make a compre12 hensive and impartial study and investigation of the pro13 grams and policies of governmental and private institutions

14 to determine the most effective ways by which such institu15 tions can promote the purposes and objectives set forth in

16 the first section of this Act.

17 (b) During the course of its study and investigation the

18 Commission may submit to the President and the Congress

19 such reports as the Commission may consider advisable.

20 The Commission shall submit to the President and the Con21 gress a final report with respect to its findings and recom22 mendations not later than January 1, 1965.
NATION' S MANPOWER REVOLUTION 3363

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1 POWERS OF THE COMMISSION

2 SEc. 7. (a) (1) The Commissioner or, on the authoriza3 tion of the Commission, any subcommittee thereof, may, for

4 the purpose of carrying out its functions and duties, hold

5 such hearings and sit and act at such times and places,

6 administer such oaths, and require, by subpena or otherwise,

7 the attendance and testimony of such witnesses, and the

8 production of such books, records, correspondence, memo9 randums, papers, and documents as the Commission or such

10 subcommittee may deem advisable. Subpenas may be issued

11 under the signature of the Chairman or Vice Chairman, or

12 any duly designated member, and may be served by any

13 person designated by the Chairman, the Vice Chairman, or

14 such member.

15 (2) In case of contumacy or refusal to obey a subpena

16 issued under paragraph (1) of this subsection, any district

17 court of the United States or the United States court of any

18 possession, or the District Court of the United States for

19 the District of Columbia, within the jurisdiction of which the

20 inquiry is being carried on or within the jurisdiction of which

21 the person guilty of contumacy or refusal to obey is found

22 or resides or transacts business, upon application by the
3364 NATION'S MANPOWER REVOLUTION

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1 Attorney General of the United States shall have jurisdiction

2 to issue to such person an order requiring such person to

3 appear before the Commission or a subcommittee thereof,

4 there to produce evidence if so ordered, or there to give testi- .

5 mony touching the matter under inquiry; and any failure to

6 obey such order of the court may be punished by the court

7 as a contempt thereof.

8 (b) Each department, agency, and instrumentality of

9 the executive branch of the Government, including inde10 pendent agencies, is authorized and directed to furnish to

11 the Commission, upon request made by the Chairman or

12 Vice Chairman, such information as the Commission deems

13 necessary to carry out its functions under this Act.

14 EXPENSES OF THE COMMISSION

15 SEC. 8. There are hereby authorized to be appropriated

16 to the Commission, out of any money in the Treasury not

17 otherwise appropriated, such sums as may be necessary to

18 carry out the provisions of this Act.
NATION' S MANPOWER REVOLUTION 3365

88TH CONGRESS

2D SESSION S. 2427

IN THE SENATE OF THE UNITED STATES

JANUARY 15,1964

Mr. HUMPHREY (for himself, Mr. BARTLETT, Mr. BREWSTER, Mr. CLARK, Mr.

HART, and Mr. WILLIAMS of New Jersey) introduced the following bill;

which was read twice and referred to the Committee on Labor and Public

Welfare

A BILL

To establish a Commission on Automation, Technology, and

Employment.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 That Congress hereby recognizes that technological progress

4 is essential to the advancement of national prosperity and

5 power. Congress also recognizes the need of promoting

6 the application of recent technological advances to meeting

7 large-scale human, community, industrial, and manpower

8 needs of this Nation. Automation resulting from tech9 nological advances, possible changes or reductions in de10 fense spending, and other factors of economic change all
3366 NATION'S MANPOWER REVOLUTION

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1 contribute to major industrial and employment problems

2 facing the Nation. The Congress declares that a wise and

3 timely solution of these problems can benefit the entire

4 Nation through increased output and productivity and the

5 avoidance of hardship to individual workers. Such objec6 tives can be most effectively achieved by7 (a) identifying and describing the major types of

8 prospective technological and economic changes which

9 are likely to occur, and their effect upon the nature of

10 employment requirements;

11 (b) reporting on appropriate policies and programs

12 for economic conversion capability resulting from possible

13 reductions or changes in defense spending;

14 (c) reporting the recent and prospective pace of

15 technological change, its impact on productivity, its

16 incidence upon particular occupations and groups of

17 workers, and its other effects upon the Nation's economy,

18 communities, families, social structure, and human

19 values;

20 (d) determining the relationship between the gen21 eral level of unemployment and the particular employ22 ment consequence of technological progress, and identi23 fying the major conditions for and existing obstacles to

24 the speedy reemployment, or other equitable adjustment,
NATION'S MANPOWER REVOLUTION 3367

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1 of workers displaced by automation and other forms of

2 economic change;

3 (e) defining those areas of unmet community and

4 human needs where application of new technologies

5 might most effectively be directed;

6 (f) examining technological developments that have

7 occurred in recent years, particularly those resulting

8 from the Federal Government research and development

9 programs, with a view to discovering those areas po!-

10 tentially most promising for civilian and industrial ex11 ploitations;

12 (g) reporting on ways by which civilian research

13 and development, together with uses of existing tech14 nology, can more effectively be directed in areas where

15 major social and economic benefits may be achieved;

16 (h) describing those actions, properly the respon17 sibility of management, labor, and governm.ent, which can

18 be undertaken to apply new technologies to large-scale

19 human and community needs;

20 (i) analyzing the balance and impact among

21 domestic industry to see how the benefits from expendi22 tare of Federal funds may accrue to a wider segment

23 of such industry;

24 (j) initiating appropriate studies and plans by
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principal defense contractors so that procedures for

reconversion and diversification will be under active

consideration;

(k) defining proper responsibility and organization of agencies in the executive branch to achieving

these objectives; and

(1) recommending ways in which the legislative

branch of the Government can be better staffed to fulfill

these objectives.

ESTABLISHMENT OF THE COMMISSION ON AUTOMATION,

TECHNOLOGY, AND EMPLOYMENT

SEC. 2. (a) For the purpose of carrying out the policy

set forth in the first section of this Act, there is hereby

established a commission to be known as the Commission

on Automation, Technology, and Employment (referred to

hereinafter as the "Commission".

(b) The Commission shall be composed of thirty-two

members as follows:

(1) Ten appointed by the President of the United

States from the executive branch of the Government representing the Department of Agriculture; Department of

Commerce; Department of Defense; Department of Health,

Education, and Welfare; Department of Labor; United -

States Arms Control and Disarmament Agency, Atomic
NATION'S MANPOWER REVOLUTION 3369

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1 Energy Commission; National Aeronautics and Space Ad2 ministration; Office of Science and Technology, and the

3 Council of Economic Advisers;

4 (2) Five appointed by the President of the Senate from

5 Members of the Senate;

6 (3) Five appointed by the Speaker of the House of

7 Representatives from Members of the House of Representa8 tives;

9 (4) Three appointed by the President of the United

10 States who shall be representative of industry and commerce;

11 (5) Three appointed by the President of the United

12 States who shall be representative of labor organizations; and

13 (6) Six appointed by the President of the .United

14 States who shall be representative of the general public, and

15 who shall be selected without regard to any interest or con16 nection they may have with any of the foregoing areas.

17 (c) Any vacancy in the Commission shall not affect its

18 powers, but shall be filled in the same manner in which the

19 original appointment was made.

20 (d) The Commission shall elect a Chairman and a Vice

21 Chairman from among its members.

22 (e) Seventeen members of the Commission shall consti23 tute a quorum.
3370 NATION'S MANPOWER REVOLUTION

6

ADVISORY PANELS TO THE COMMISSION ON THE APPLICA2 TION OF NEW TECHNOLOGY TO COMMUNITY AND MAN3 POWER NEEDS

4 SEC. 3. The Commission may establish advisory panels

5 which shall consist of persons of exceptional competence

6 and experience in the fields of science and technology, eco7 nomics, political science, or operations analysis. Such

8 advisory panel members shall be drawn equally from the

9 Government, private industry, and nonprofit educational

10 and technological institutions, and shall be persons available

11 to act as consultants for the Commission.

12 COMPENSATION OF MEMBERS OF THE COMMISSION

13 SEC. 4. (a) Members of Congress who are members

14 of the Commission shall serve without compensation in

15 addition to that received for their services as Members of

16 Congress; but they shall be reimbursed for travel, subsistence,

17 and other necessary expenses incurred by them in the per18 formance of the duties vested in the Commission.

19 (b) The members of the Commission who are in the

20 executive branch of the Government shall serve without

21 compensation in addition to that received for their services

22 in the executive branch, but they shall be reimbursed for

23 travel, subsistence, and other necessary expenses incurred

24 by them in the performance of the duties vested in the

25 Commission.
NATION' S MANPOWER REVOLUTION 3371

7

1. (c) The members of the Commission appointed from

2 private life shall each receive $75 per diem when engaged

3 in the actual performance of duties vested in the Commis4 sion, plus reimbursement for travel, subsistence, and other

5 necessary expenses incurred by them in the performance of

6 such duties.

7 STAFF OF TTTE COMMISSION

8 SEC. 5. (a) The Commission may appoint and fix the

9 compensation of such personnel as it deems advisable in

10 accordance with the provisions of the civil service laws and

11 the Classification Act of 1949.

12 (b) The Commission may procure, without regard to

13 the civil service laws and the classification laws, temporary

14 and intermittent services (including those of members of the

15 advisory panel) to the same extent as authorized for the

16 departments by section 15 of the Act of August 2, 1946

17 (60 Stat. 810; 5 U.S.C. 55a) , but at rates not to exceed

18 $75 per diem for individuals.

19 DUTIES OF THE COMMISSION

20 SEC. 6. (a) The Commission shall make a compre21 hensive and impartial study and investigation of the pro22 grams and policies of governmental and private institutions

23 to determine the most effective ways by which such institu24 dons can promote the purposes and objectives set forth in

25 the first section of this Act.
3372

1.

2

3

4

5

6

7

8

9

10

NATION'S MANPOWER REVOLUTION

8

(b) During the course of its study and investigation the

Commission may submit to the President and the Congress

such reports as the Commission may consider advisable.

The Commission shall submit to the President and the Congress a final report with respect to its findings and recommendations within two years after enactment of this Act.

POWERS OF THE COMMISSION

SEC. 7. (a) (1) The Commissioners or, on the authorization of the Commission, any subcommittee thereof, may,

for the purpose of carrying out its functions and duties,

11 hold such hearings and sit and act at such times and places.

12 administer such oaths, and require, by subpena or other13 wise, the attendance and testimony of such witnesses, and

14 the production of such books, records, correspondence.

15 memorandums, papers, and documents as the Commission

16 or such subcommittee may deem advisable. Subpenas may

17 be issued under the signature of the Chairman or Vice

18 Chairman, or any duly designated member, and may be

19 served by any person designated by the Chairman, the Vice

20 Chairman, or such member.

21 ( 2 ) In case of contumacy or refusal to obey a subpena

22 issued under paragraph (1) of this subsection, any district

23 court of the United States or the United States court of any

24 possession, or the District Court of the United States for the

25 District of Columbia, within the jurisdiction of which the in-
1

2

3

4

5

6

7

8

9

10

11

12 the executive branch of the Government, including independ13 ent agencies, is authorized and directed to furnish to the

14 Commission, upon request made by the Chairman or Vice

15 Chairman, such information as the Commission deems neces16 sary to carry out its functions under this Act.

17 EXPENSES OF THE COMMISSION

18 SEC. 8. There are hereby authorized to be appropriated

19 to the Commission, out of any money in the Treasury not

20 otherwise appropriated, such sums as may be necessary to

21 carry out the provisions of this Act.

NATION'S MANPOWER REVOLUTION 3373

9

quiry is being carried on or within the jurisdiction of which

the person guilty of contumacy or refusal to obey is found

or resides or transacts business, upon application by the Attorney General of the United States shall have jurisdiction

to issue to such person an order requiring such person to appear before the Commission or a subcommittee thereof,

there to produce evidence if so ordered, or there to give testimony touching the matter under inquiry; and any failure to

obey such order of the court may be punished by the court

as a contempt thereof.

(b) Each department, agency, and instrumentality of
3374 NATION'S MANPOWER REVOLUTION

88TH CONGRESS

2u SESSION S. 2623

IN THE SENATE OF THE UNITED STATES

MARCH 10 (legislative day, MARCH 9), 1964

MT. HART (for himself, MT. WILLIAMS Of New Jersey, Mr. RANDOLPH, Mr.

HUMPHREY, Mr. CLARK, and Mr. MORSE) introduced the following bill;

which was read twice and referred to the Committee on Labor and Public

Welfare

A BILL

To establish a National Commission on Automation and Technological Progress.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 That Congress finds it imperative to accelerate the national

4 effort to5 (a) identify and assess the past effects and the

6 current and prospective role and pace of technological

7 change;

8 (b) identify and describe the impact of technological

9 and economic change on production and employment,

10 including new job requirements and the major types of

11 worker displacement, both technological and economic,
NATION'S MANPOWER REVOLUTION 3375

2

1 which are likely to occur during the next ten years; the

2 specific industries, occupations and geographic areas

3 which are most likely to be involved; and the social and

4 economic effects of these developments on the Nation's

5 economy, manpower, communities, families, social struc6 ture, and human values;

7 (c) define those areas of unmet community and

8 human needs toward which application of new tech9 nologies might most effectively be directed, encompass10 ing an examination of technological developments that

11 have occurred in recent years, including those resulting

12 from the Federal Government research and development

13 programs;

14 (d) assess the most effective means for channeling

15 new technologies into promising directions, including

16 civilian industries where accelerated technological ad17 vancements will yield general benefits, and assess the

18 proper relationship between governmental and private

19 investment in the application of new technologies to

20 large-scale human and community needs;

21 (e) recommend, in addition to those actions which

22 are the responsibility of management and labor, and of

23 State and local governments, specific administrative and

24 legislative steps to be taken by the Federal Government

25 in meeting its responsibility (1) to support and promote
3376 NATION'S MANPOWER REVOLUTION

3

1 technological change in the interest of continued eco2 nomic growth and improved well-being of our people,

3 and (2) to continue and adopt measures which will

4 facilitate occupational adjustment and geographical

5 mobility, and (3) to share the costs and help prevent

6 and alleviate the adverse impact of change on displaced

7 workers.

8 SEC. 2. In order to carry out the objectives of this Act

9 there is hereby established the National Commission on

10 Automation and Technological Progress, hereinafter referred

11 to as the Commission.

12 SEC. 3. The Commission shall be composed of fourteen

13 members appointed by the President, by and with the advice

14 and consent of the Senate, from among persons outside the

15 Government with a competency in the areas to be dealt with

16 by the Commission. One of such members shall be desig17 by the President as Chairman of the Commission.

18 Eight members of the Commission shall constitute a

19 quorum. Any vacancy in the Commission shall not affect its

20 power, but shall be filled in the same manner in which the

21 original appointment was made.

22 SEc. 4. The Commission shall make a comprehensive

23 and impartial study and make recommendations as needed

24 for constructive action in the areas designated in section 1

25 of this Act.
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

NATION'S MANPOWER REVOLUTION 3377

4

SEC. 5. Members of the Commission appointed from outside Government shall each receive 100 per diem when

engaged in the actual performance of duties of the Commission.

SEC. 6. There is hereby established a Federal Interagency Committee consisting of the heads of the Department

of Agriculture, Labor, Commerce, Defense, Health, Education, and Welfare, and the National Aeronautics and Space

Administration, and the Chairman of the Council of Economic

Advisers, and the Director of the Office of Science and Technology, or their designees, to advise the Commission and to

maintain effective liaison with the resources of such departments and agencies. The Chairman of the Committee shall

be the Secretary of Labor.

SEC. 7. (a) The Commission shall have power to

appoint and fix the compensation of such personnel as it

deems advisable, without regard to the provision of the civil

service laws and the Classification Act of 1949, as amended.

In addition the Commission may procure temporary and

20 intermittent services to the same extent as is authorized for

21 the departments by section 15 of the Act of August 2, 1946

22 (60 Stat. 810) , but at rates not to exceed $75 per diem for

23 individuals.

24 (b) The Commission is authorized to appoint an execu35-388 0-64--43t. 10 3
3378 NATION'S MANPOWER REVOLUTION

5

1 tive secretary to oversee the work of the staff under the

2 general direction of the Commission.

3 SEC. 8. All members and other personnel of the Com4 mission shall be reimbursed for travel, subsistence and neces5 sary expenses in accordance with law.

6 'Sc. 9. The Department of Labor. shall provide the

7 Commission necessary administrative services (including

8 those related to budgeting, accounting, financial reporting,

9 personnel, and procurement) for which payment shall be

10 made in advance, or by reimbursement, from funds of the

11 Commission in such amounts as may be agreed upon by the

12 Commission and the Secretary of Labor.

13 SEC. 10. The Comniission, on the authorization of the

14 Commission, any subcommittee or panel thereof, may, for

15 the purpose of carrying out its functions and duties, hold

16 such hearings and sit and act at such times and places,

17 administer such oaths, and require the attendance of such

18 witnesses, and the production of such books, records, cone19 spondence, memorandums, papers, and documents, as the

20 Commission or such subcommittee may deem advisable.

21 SEC. 11. The Commission is authorized to negotiate and

22 enter into contracts with private organizations to carry out

23 such studies and to prepare such reports as the Commission

24 feels necessary in order to carry out its duties.
NATION'S MANPOWER REVOLUTION 3379

6

1 SEC. 12. The Commission is authorized to secure directly

2 from any executive department, agency, or independent in3 strumentality of the Government any information it deems

4 necessary to carry out its functions under this Act; and each

5 such department, agency, and instrumentality is authorized

6 and directed to cooperate with the Commission and, to the

7 extent permitted by law, to furnish such information to the

8 Commission, upon request made by the Chairman.

9 SEC. 13. The Commission shall submit a final report

10 of, its findings and recommendations to the President and

11 the Congress by January 1, 1966. The Commission shall

12 cease to exist thirty days after submitting its final report.

13 SEC. 14. There are hereby authorized to be appropriated

14 to the Commission, out of any money in the Treasury not

15 otherwise appropriated, such sums as may be necessary to

16 carry out the provisions of this Act.
3380 NATION'S MANPOWER REVOLUTION

EXECUTIVE OFFICE OF THE PRESIDENT,

OFFICE OF SCIENCE AND TECHNOLOGY,

Washington, August 12, 1963.

H011. LISTER HILL,

U.S. Senate, Washington, D.C.

DEAR SENATOR: Thank you for the opportunity to comment on Senate Joint

Resolution 105, to authorize the appointment of a Presidential Commission on

Automation, a measure whose objectives and overall approach I thoroughly

endorse. If such a Commission is authorized by the Congress I would be pleased

to serve in an ex officio capacity, and would be willing to cooperate in the work of

the group in every useful way.

I believe that the intended purpose of the Commission, to assess the nature

and effects on productivity and employment of future technological change, is

an essential task for the Nation, and that the Federal Government should appropriately take the lead along with representatives of the public to develop a basis for

future national policy on this important issue. A Presidential Commission on

Automation offers an effective way to bring the perspectives and ongoing work of

Government agencies together with the interests and responsibilities of industry,

labor, and scholars familiar with the problems of economic adjustment associated

with technological change.

I am particularly gratified that both the mandate and composition of the

Commission as proposed in Senate Joint Resolution 105 will enable an informed

and balanced exploration of the scientific and technical factors that affect the

processes of technological change and economic adjustment. It will be important

for the Commission to recognize the contributions that technological progress

makes to national well-being and prosperity. It will also be important to identify

ways in which our constantly increasing store of scientific knowledge can contribute to maintaining maximum levels of productive employment.

Just as the development in the 19th century of textile production in the mill

towns of Massachusetts and the rapid spread of railroads to the West created

new jobs and opportunities, technology in the age of space and atomic energy

has the capability, through the development of new products and processes, to

further advance economic growth and the wider diffusion of prosperity to all our

people.

Consequently, the proposed Commission could perform a valuable service in

assessing the national role that our scientific and technological resources can

and should play in future years.

Sincerely,

H011. LISTER HILL,

Chairman, Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: We have been asked for views on four related bills

that would establish commissions to study the effects of technological change,

including automation, on the economy and to recommend measures for assuring

the full benefits of technology while minimizing any adverse effects. These

bills are Senate Joint Resolution 105, "To authorize appointment of a Presidential

Commission on Automation"; S. 2298, "To establish a Commission on the Application of Technology to Community and Manpower Needs, and for other purposes"; S. 2427, "To establish a Commission on Automation, Technology, and

Employment"; and S. 2623, "To establish a National Commission on Automation

and Technological Progress." The establishment of the Commission provided

for in the last bill was recently recommended by the President, who submitted

draft legislation introduced as S. 2623.

The Bureau of the Budget supports the general objectives of all four bills,

as it is amply clear that inadequate knowledge of the relationship of technological

change to the economy has hampered the development of sound public policy.

Recognizing this shortcoming the administration has recently taken certain

administrative actions to improve our state of knowledge. For example, the

President on December 21, 1963, established a Committee on the Economic

Impact of Defense and Disarmament to assess, coordinate, and stimulate studies

in this area. The Department of Commerce has been increasing its activities

JEROME B. WIESNER.

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET,

Washington, D.C., June 12, 1964.
NATION'S MANPOWER REVOLUTION 3381

directed toward determining how best to channel technological information to

potential users. The Department of Labor has been giving increasing attention

to the current and projected impact of automation on the economy and on the

labor force, including studies for the President's Advisory Committee on LaborManagement Policy.

These executive branch actions do not lessen the desirability of a study by an

outside group that can provide new perspectives in assessing the relationship

of technology to the economy. In our view it is necessary that any such group

be so organized as to assure an independent evaluation by individuals who are

not constrained by their official positions. Conversely, we believe that the

legislative and the executive branches can better maintain their traditional

independence to assess recommendations resulting from a study, if their members

are not assigned responsibility for preparation of the study.

The legislation recommended by the President, therefore, provides that the

Commission be composed of members drawn from outside Government, to be

appointed by the President with the advice and consent of the Senate. A Commission so constituted would solicit information and views from members of the

legislative and executive branches in the conduct of its work. It would make

a comprehensive study of the current and probable future impact of technological

change as contrasted with the more specialized studies now underway within

Government, which, however, are expected to be of material assistance to the

Commission's work.

In focusing on the relationship of technological change to the economy, the

scope of the Commission's study should be sufficiently broad to encompass all

significant aspects of this complex area. To this end, in preparing draft legislation the administration referred to the various study objectives cited in the other

three bills. We believe S. 2623 has benefited greatly from incorporating the best

features of the preceding bills.

The Bureau of the Budget urges favorable consideration by your committee

of S. 2623, the enactment of which would be in accord with the program of the

President.

Sincerely yours,

Hon. LISTER HILL,

U.S. Senate,

Washington, D.C.

PHILLIP S. HUGHES,

Assistant Director for Legislative Reference.

EXECUTIVE OFFICE OF THE PRESIDENT,

OFFICE OF SCIENCE AND TECHNOLOGY,

Washington,, June 15, 1964.

DEAR SENATOR HILL: I am writing in response to your recent requests for

comments on S. 2427 (introduced by Senator Humphrey and others to establish

a Commission on Automation, Technology, and Employment) and on S. 2623

(introduced by Senator Hart and others to establish a National Commission on

Automation and Technological Progress, as recently recommended by the

President). Both bills—along with Senate Joint Resolution 105 and S. 2298 on

which my predecessor has previously commented—call for a timely and orderly

beginning on the development of policies for meeting related national problems

of the utmost urgency. Because these matters are so important, I strongly

recommend that action be taken in this area during this session of the Congress.

I wish to endorse both the objectives and mechanisms of S. 2623, which I

believe would effectively serve the purposes of the other three proposals. In

the President's words, that measure would authorize a balanced and objective

study of current and future technological trends to seek out recommendations

for action "to secure maximum benefits with the least possible harmful effects

upon the Nation." I consider it absolutely essential to the future economic

and social health of the country that such a standard be applied to the development of national policies to reconcile the Nation's need for continuing technological innovation with those problems of worker displacement that are associated

with automation. In addition, S. 2623 would bring able, independent judgment

to bear on the vital task of identifying national needs and opportunities for

further technological progress, especially in civilian industries, during and after

the next decade.
3382 NATION'S MANPOWER REVOLUTION

The bill would authorize the undertaking of such a study by a commission of

non-Government experts appointed by the President and confirmed by the

Senate. In this way, S. 2623 would foster the development of an objective and

professionally well qualified perspective on problems that face both the executive

and legislative branches, and States and localities as well, now and for the foreseeable future. Furthermore, I believe the provision of a Federal interagency

committee to provide advice and liaison would help to make the extensive

resources of the executive branch available to the Commission, and, if the

measure is enacted, I would be pleased to participate in every useful way.

Sincerely,

DONALD F. HORNIG.

Hon. LISTER HILL,

Chairman Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR SENATOR HILL: You have requested our views on S. 2427 and S. 2623,

bills to establish a Commission on Automation and Technological Progress. We

share with the sponsors of these bills, and with many other Members of the

Congress, concern over the problems with which the proposed Commission would

be asked to deal.

Advancing technology is the basic source of our rising standard of living; it

reduces the economic burdens of providing for our national security; and it

strengthens our ability to assist the economic development of the free world. We

recognize, however, that if we are to enjoy fully the benefits of advancing technology, our economic system must be enabled to adapt flexibly and effectively to

the changes which such advances produce. As a nation we must put to work the

increased productive potential made possible by technological change, in a way

which will satisfy more fully the needs of our people. The Federal Government

not only has an appropriate role to play in encouraging advancesi n technology but

also in facilitating the process of adjustment to such advances. Indeed, these

were major themes of chapter 3 of the Council's January 1964 Annual Report.

Furthermore, we agree with one of the underlying premises of the proposed bills

that the Federal Government has a special responsibility for facilitating adjustments to significant economic changes, including shifts in the pattern of private and

Government demand. We particularly endorse the view that the Federal Government has a responsibility to share the costs and help prevent and alleviate the

adverse impact of change on displaced workers.

We agree that these are complex problems that require further study, which

may in turn lead to revisions in current Federal policies and programs. And as

we have stated before, we feel that a presidentially appointed commission can

undoubtedly contribute to our improved understanding of the many difficult

problems reflected in the terms of reference of the proposed bills. We, therefore,

endorse the general purposes of this legislation.

As you are aware, there are before the Congress at this time a number of proposals along the same general line as S. 2427 and S. 2623. There appears to be a

wide consensus on the basic purposes; but we believe that an organizational

structure along the general lines provided for in S. 2623 would be most effective.

It is our view that a commission appointed by the President made up of private

citizens would best accomplish the desired goals.

The Interagency Committee that would be established by S. 2623 would of

course work closely with such a commission, providing many of the staff services

and such other assistance as the Commission might require. A commission so

constituted would be in the best position to undertake an impartial and effective

evaluation of the various problems involved, and could develop recommendations

most useful to the executive branch and to the Congress.

A mixed commission containing members from the executive and legislative

branches as well as private citizens seems to us better adapted to a situation in

which the need if primarily to develop solutions to problems whose nature is

well understood. In the present case it seems to us that what is needed is an

expert commission of private citizens to explore and define the nature of the

problem and the possible approaches to solutions.

The Council of Economic Advisers therefore recommends enactment of S. 2623.

The Bureau of the Budget advises that it has no objection to the submission of

THE CHAIRMAN OF THE COUNCIL OF ECONOMIC ADVISERS,

Washington, June 16, 1964.
NATION'S MANPOWER REVOLUTION 3383

this report and that enactment of S. 2623 would be in accord with the program

of the President.

Sincerely,

GARDNER ACKLEY, Acting Chairman.

Hon. LISTER HILL,

Chairman Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: This replies further to your request for a report by the

National Aeronautics and Space Administration on S. 2623, the bill to establish

a National Commission on Automation and Technological Progress.

S. 2623 would establish a National Commission on Automation and Technological Progress to be composed of 14 members from outside the Government, appointed by the President with the advice and consent of the Senate. The

Chairman would be designated by the President.

The National Commission would study the past, present, and future role of

technological change and its impact on production and employment, including

worker displacement and new job requirements expected during the next 10 years.

The study would include the industries, occupations, and geographic areas likely

to be involved, and the social and economic effects of technological change on the

Nation. Community and human needs would be defined toward which application of new technologies (including those resulting from Federal research and

development programs) might best be directed. Assessment of the most effective

means for channeling technological advances into promising directions would be

made, including an assessment of the proper relationship between governmental

and private investment in such application to community needs. Specific

administrative and legislative actions would be recommended for the Federal

Government to support and promote technological progress, facilitate occupational

adjustment and geographical mobility, and share the costs and help prevent and

alleviate the adverse impact of change on displaced workers.

The Commission would be directed to make a comprehensive and impartial

study and make a final report of its findings and recommendations to the President

and the Congress by January 1, 1966, following which it would be disbanded.

To perform its functions, the Commission would be authorized to appoint an

executive secretary and staff without regard to the civil service laws and the

Classification Act of 1949, procure temporary and intermittent services, pay travel

and other expenses, hold heairngs, administer oaths and subpena witnesses and

documents, enter into contracts with private organizations, and secure information from any Government agency. The Department of Labor would provide

necessary administrative services, and other agencies would be authorized and

directed to cooperate with the Commission, and, to the extent permitted by law,

to furnish it with information.

The legislation would also create a Federal interagency committee to advise

the Commission and to maintain liaison between the Commission and various

agencies. The Committee would be under the chairmanship of the Secretary

of Labor and would include the Administrator of the National Aeronautics and

Space Administration, or his designee.

The National Aeronautics and Space Administration favors the enactment of

S. 2623. The need for such a commission or group to effect such a study exists.

There is a deficiency of information with respect to the interrelationships of

manpower resources and national objectives, such as defense, space exploration,

health, and the application of technology to civilian industries. Such information

is vital to effective policy formulation by the executive branch and the Congress.

The Bureau of the Budget has advised that enactment of S. 2623 would be in

accord with the program of the President.

Sincerely yours,

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION,

Washington, D.C., June 28, 1964.

RICHARD L. CALLAGHAN,

Assistant Administrator for Legislative Affairs.
3384 NATION'S MANPOWER REVOLUTION

GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE,

Washington, D.C., June 26, 1964.

Hon. LISTER HILL,

Chairman Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: Reference is made to your requests for the views of the

Department of Defense with respect to S. 2298 to establish a Commission on the

Application of Technology to Community and Manpower Needs, and for other

purposes, and on S. 2623 to establish a National Commission on Automation and

Technological Progress.

Both bills would establish commissions to determine the impact of technological

and economic advances on production and employment and to make recommendations on how to apply such advances in the bet interests of the Nation

while minimizing any adverse effects.

S. 2298 would include on its Commission representatives from the executive

and legislative branches as well as from private life while the Commission recommended by S. 2623 would be comprised entirely of non-Government members.

Both bills would require the full cooperation of executive departments and

agencies.

The Department of Defense is in agreement with the objectives of the bills.

Defense supported research and development have contributed to substantial

technological advances, many of which have potential application in meeting

community and national needs. The Department will cooperate fully with any

commission or agency which is established or designated by the Congress to study

means of exploiting, for nondefense uses, those skills and technologies which have

been created to meet defense needs.

On December 21, 1963, President Johnson established a Committee on the

Economic Impact of Defense and Disarmament to assess, coordinate, and stimulate studies in this area. The Departments of Commerce and Labor are actively

engaged in their respective roles of determining the best way to channel technological information to potential users and the impact of automation on the economy

and the labor force, including studies for the President's Advisory Committee on

Labor-Management Policy. It is believed that the Commission, proposed under

S. 2623 comprised of persons outside the Government, with competency in the

areas to be dealt with, would most effectively complement the above groups in

providing solutions to the problems addressed by the two bills.

Under S. 2623, the Commission would recommend, in addition to those actions

which are the responsibility of management and labor, and of State and local

governments, specific administrative and legislative steps to be taken by the

Federal Government in meeting its responsibility.

Accordingly, the Department of Defense recommends enactment of S. 2623 in

lieu of S. 2298 as best designed to accomplish the intended purposes.

We have been advsied by the Bureau of the Budget that there is no objection

to the submission of this report and that the enactment of S. 2623 would be in

accord with the program of the President.

Sincerely,

JACK L. STEMPLER,

(For John T. Mc Naughton).

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,

June 26, 1964.

Hon. LISTER HILL,

Chairman, Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: This letter is in response to your request of March 11,

1964, for a report on S. 2623, a bill to establish a National Commission on Automation and Technological Progress.

The bill provides for study and review of the possibilities and problems of

automation and technological change by a National Commission to be appointed

by the President. The Commission would be responsible for identifying the

impact of technological and economic change on American life, including the _

Nation's economy, manpower, communities, families, social structure, and human

values; defining areas of unmet needs where new technology may be required;

and recommending programs that will bring about effective adaptation to technological change.

This Department heartily endorses S. 2623. The many promises and problems

of automation and technological change are of concern to this Department.
NATION'S MANPOWER REVOLUTION 3385

Federal programs in health, education, and welfare will all be affected by and

should assist in achieving the promises and alleviating the problems of the technological revolution of the second half of this century.

There is no domestic study role more important or more challenging than the

one which would be assigned to the National Commission on Automation and

Technological Progress. The potential of technology to fulfill basic economic

and health needs of all citizens is immense. The potential of technology to

produce severe adverse side effects upon large segments of society, particularly

if automation leads to large-scale unemployment, is likewise immense. For

these reasons, the Government has both an opportunity and a duty to exercise

initiative and leadership in the study of automation and technological change.

Appointment of a commission of private citizens to conduct a study with assistance from Federal departments and agencies will provide part of the initiative

which is required.

We recommend, therefore, that S. 2623 be passed.

We are advised by the Bureau of the Budget that there is no objection to the

presentation of this report from the standpoint of the administration's program

and that enactment of S. 2623 would be in accord with that program.

Sincerely,

WILBUR J. COHEN,

Assistant Secretary.

DEPARTMENT OF AGRICULTURE,

Washington, D.C., June 30, 1964.

Hon. LISTER HILL,

Chairman, Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: This is in reply to your request for a report on S.

2623, a bill to establish a National Commission on Automation and Technological

Progress, and S. 2427, a bill to establish a Commission on Automation, Technology, and Employment.

The Department favors S. 2623 and recommends that it be passed in preference

to S. 2427.

S. 2623 authorizes the establishment of a Commission on Automation and

Technological Progress composed of 14 members from among persons outside the

Government with a competency in the areas to be dealt with by the Commission.

It also provides for the establishment of a Federal Interagency Committee consisting of the Secretaries of the Departments of Agriculture, Labor (Chairman of

the Committee), Commerce, Defense, and Health, Education, and Welfare; the

heads of the National Aeronautics and Space Administration the Chairman of

the Council of Economic Advisers, and the Director of the Office of Science and

Technology, or their designees, to advise the Commission and to maintain effective liaison with their departments or agencies. The bill sets forth the powers

and duties of the Commission and provides for its expenses, compensation, and

staffing.

The Commission is to make a comprehensive and impartial study of the current

and probable future impact of technological change and make recommendations

as needed for constructive action to gain the maximum benefit from automation

and technological advances and for the prevention and alleviation of adverse

impact on displaced workers. The Commission is authorized to negotiate and

enter into contracts with private organizations to carry out studies and to prepare

such reports as it feels necessary to carry out its duties. It is further authorized

to secure directly from any executive department, agency, or instrumentality of

the Government any information it deems necessary to carry out its functions.

The Commission shall submit a final report of its findings and recommendations

to the President and the Congress by January 1, 1966, and it shall cease to exist

30 days after submitting its final report.

The rapid mechanization and other technological changes in agriculture have

had, and will continue to have, important effects on increasing production and

reducing employment in agriculture. Technological changes in other industries

also affect the employment prospects of rural people in nonfarm jobs. We believe, therefore, that the contributions of the proposed Commission will be of

benefit in anticipating and alleviating some of the problems associated with

technological developments in agriculture.

S. 2623 appears to be an improvement over S. 2427 in several respects. Among

other things, it provides for 14 members as compared with the much larger
3386 NATION'S MANPOWER REVOLUTION

number in the second bill. The Commission would be composed of people with

competency in the area to be studied. The Government stands in particular

need of the advise of people who have given special attention to the problems of

automation and technology, and it would appear that this could be most quickly

provided by the smaller committee of objective experts. S. 2623 provides for

participation of the Federal agencies through the proposed Interagency Committee, while the executive Branch, the Congress, the economic interests concerned, and the general public will have full benefit of this urgently needed investigation through the final report and recommendations which will be submitted

both to the President and to the Congress.

The Bureau of the Budget advises that there is no objection to the presentation

of this report and that enactment of S. 2623 would be in accord with the program

of the President.

Sincerely yours,

Hon. LISTER HILL,

Chairman, Committee on Labor and Public Welfare,

U.S. Senate.

Dear Senator HILL: This responds to your letter of November 21, 1963,

requesting our comments on S. 2298, a bill to establish a Commission on the

Application of Technology to Community and Manpower Needs, and for other

purposes.

The primary objective of the proposed Commission study would be to examine

thoroughly technological development, particularly that resulting from the

Federal Government's research and development effort, with a view to pointing

out those areas: (1) potentially Most promising for civilian and industrial exploitation; and (2) whose exploitation would create new industries requiring

substantial segments of the available manpower and labor force. An additional

benefit of the Commission study would be a greater understanding of the feasibility of a transfer of industrial skills and technology from defense-oriented

programs to work on civilian programs.

The AEC is very much interested in the areas covered by S. 2298 and is sympathetic to the major objectives of the bill. As we have previously pointed out,

the conversion of defense-oriented programs to civilian programs would be one

of the problems with which the proposed Commission would be concerned. The

problems of economic impact in the &vent of future defense cutbacks are areas

of considerable concern to AEC, and we would particularly like to see them

included in any study of manpower, automation and application of technology

to human needs. In this connection the President, on December 21, 1963,

established a high-level Government committee to coordinate the work of Federal

agencies in appraising the economic impacts of disarmament and changes in

defense spending.

We believe that the most desirable way to seek answers to these complex

problems is through a National Commission on Automation and Technological

Progress, proposed by S. 2623, introduced on March 10, 1964. The AEC strongly

supports the objectives of S. 2623.

The Bureau of the Budget has advised that there is no objection to the presentation of this report and that enactment of S. 2623 would be in accordance with

the program of the President.

Sincerely yours,

ORVILLE L. FREEMAN, Secretary.

Hon. LISTER HILL,

Chairman, Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: This is in further response to your request for our views

on S. 2623, a bill to establish a National Commission on Automation and Technological Progress.

U.S. ATOMIC ENERGY COMMISSION,

Washington, June 30, 1964.

A. R. LUEDECKE,

General Manager.

DEPARTMENT OF LABOR,

OFFICE OF THE SECRETARY,

Washington, July 2, 1964.
NATION'S MANPOWER REVOLUTION 3387

We ask that you also consider this report as an expression of our views on the

following bills relating to studies of technological change: S. 185, Senate Resolution 50, Senate Joint Resolution 105, S. 2298, and S. 2427. We endorse the objectives of these measures. However, in many respects they overlap and duplicate

S. 2623 which we believe proposes the most desirable means of studying this

important subject and of developing recommendations for constructive action.

We strongly urge the earliest possible enactment of this bill.

It is vitally necessary that we support and promote technological progress which

will strengthen our economy. If we properly meet our responsibilities, the new

technologies thus developed can yield great benefits to industry generally and

satisfy unmet human needs.

We must simultaneously act to safeguard against the sacrifice of human values

by helping to prevent and alleviate the adverse effects of such developments on

displaced workers and disrupted communities and businesses.

The creation of a National Commission on Automation and Technological

Progress as proposed in S. 2623 is a significant step in our efforts to direct and

control both the beneficial and potentially harmful effects of technological change.

The activities of the Commission are not a substitute for efforts now being

carried on by existing Federal agencies. A high-level national commission will

command national attention, respect, and acceptance, and thereby provide effective aid in the development of a common purpose. The proposed Commission's

inquiry will be of a scope well beyond that of existing specified study efforts

to provide a perspective not feasible from diverse separate examinations. It

will also go further than the current studies of the President's Advisory Committee on Labor-Management Policy. As the committee has noted, we need

a combination of private and governmental action, consistent with the principle

of a free society, in this area. At the request of the President, the committee's

studies are emphasing what is being done and can be done to meet adjustment

problems through private action.

The proposed Commission will undertake what the President described in his

recent Manpower Report as "a broader evaluation of our technological course

and the means of channeling (technological) progress toward meeting our society's unfilled needs." It will provide informed guidance on such fundamental

Subjects as the rapidity with which technological advances are likely to proceed, where they probably will have their greatest impact, what forms such

impact will take, and where and how we must specifically prepare to avert undue

burdens on individual workers and communities. It can help close the gap between achievement in reserach and the laboratory and its application to the

solution of unmet social and economic needs.

This bill provides for a Federal Interagency Committee to assist the Commission in drawing on the knowledge, advice, and resources available from these

agencies. In this connection, it is noted that the bill provides for the Secretary

of Labor to serve as Chairman of the Interagency Committee. We believe that

it should be revised to designate the Secretary of Commerce as Cochariman as

reflected in the bill reported by the House Committee on Education and Labor

H.R. 11611. The Secretaries of Labor and Commerce now serve as Cochairmen

of the President's Committee on Labor-Management Policy. Their working

relationship on this Committee, and in fact, throughout this administration has

been productive and harmonious. This relationship has been particularly close

in dealing with matters in the area of automation and technological change.

We also note that H.R. 11611 makes certain other amendments in the bill to

which we have no objection.

The time has come to survey our technological future comprehensively and

to project our technological progress to meet national needs, confident that we

will minimize and alleviate any adverse effects.

The Bureau of the Budget advises that there is no objection to the submission

of this report and that enactment of S. 2623 would be in accord with the program

of the President.

Yours sincerely,

W. WILLARD WIRTZ,

Secretary of Labor.
3388 NATION'S MANPOWER REVOLUTION

Hon. LISTER HILL,

Chairman Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: This letter is in further response to your requests for

views of this Department concerning four bills to establish commissions to study

problems relating to automation and this letter supplements the statement of

testimony given by Secretary Hodges before the Subcommittee on Employment

and Manpower.

The bills are Senate Joint Resolution 105, to authorize appointment of a Presidential Commission on Automation; Senate 2298, to establish a Commission on

the Application of Technology to Community and Manpower Needs, and for

other purposes; Senate 2427, to establish a Commission on Automation, Technology, and Employment; and Senate 2623, to establish a National Commission

on Automation and Technological Progress. As Secretary Hodges has testified,

this Department believes that S. 2623, which was submitted to the Congress by

the President, is the most suitable to achieve the objectives included in all of these

bills.

As indicated in Secretary Hodges' statement supporting S. 2623, this Department recommends an amendment to provide that the Secretaries of Labor and

Commerce shall serve as Cochairmen of the Federal Interagency Committee.

Such an amendment was supported by the Secretary of Labor in testimony on

H.R. 10310, a companion bill, before the House Select Committee on Labor.

For this purpose, we suggest that the last sentence of section 6 of S. 2623 be deleted and the following sentence inserted in lieu thereof:

"The Secretary of Commerce and the Secretary of Labor shall serve as Cochairmen of the Committee."

Also, Secretary Hodges recommended in his statement that section 9 be amended

to provide that the Departments of Commerce and Labor shall be jointly responsible for furnishing administrative services for the Commission. For this purpose,

we suggest that section 9 be amended to read as follows:

"SEc. 9. The Department of Commerce and the Department of Labor shall

provide the Commission necessary administrative services (including those related

to budgetin,g, accounting, financial reporting, personnel, and procurement) for

which payment shall be made in advance or by reimbursement, from funds of

the Commission in such amounts as may be agreed upon by the Commission and

the Secretaries of Commerce and Labor."

We have been advised by the Bureau of the Budget that there would be no

objection to submission of our report from the standpoint of the administration's

program and further that enactment of S. 2623 would be in accord with the

program of the President.

Sincerely,

ROBERT E. GILES, General Counsel.

Senator CLARK. Secretary Hodges, we are very happy to have you

with us this morning. I see you have a relatively short, prepared

statement. Would you prefer to read it, or would you like to put

it in the record?

GENERAL COUNSEL OF THE DEPARTMENT OF COMMERCE,

Washington, D.C.

STATEMENT OF LUTHER H. HODGES, SECRETARY OF COMMERCE,

ACCOMPANIED BY ROBERT E. GILES, GENERAL COUNSEL, AND

RICHARD H. HOLTON, ASSISTANT SECRETARY FOR ECONOMIC

AFFAIRS

Secretary HODGES. I would like to put it in the record Mr. Chairman, and then sort of talk from it.

Senator CLARK. That will be done. The statement of Secretary

Hodges will be printed in full in the record at this point.

(The prepared statement of Secretary Hodges follows:)
NATION'S MANPOWER REVOLUTION 3389

PREPARED STATEMENT OF LUTHER H. HODGES, SECRETARY OF COMMERCE

Mr. Chairman and members of the subcommittee, I appreciate this opportunity

to testify in support of the President's proposal to establish a National Commission on Automation and Technological Progress.

This Nation is facing a challenging dilemma. On the one hand, we must

achieve continuous technological change if we are to have rising productivity and

hence rising incomes in this country. On the other hand, we must ease the problerr s which both labor and management face in their attempts to adjust to such

change.

This is not a new dilemma—we have faced it in greater or lesser degree almost

since our Republic was born. Now, however, the question may be taking on a

new urgency. While our competitive position in international markets and our

great need for a continually expanding economy call for further technological

progress, adjustment to technological change may be increasingly difficult for

the affected firms and workers. This bill will provide a charter for our Government and for members of the Commission to review in calm deliberation the

problems of technological change.

Under this proposed legislation the President would seek to draw together 14

eminent citizens, with the advice and consent of the Senate, to assist the Nation

to promote, understand, and deal more effectively with technological change.

More specifically, this Commission is called upon to make some judgment about

the current rate and range of technological change compared with that which we

have experienced in the past. It would try to foresee the impact of anticipated

technical change in terms of the specific industries, occupations, and geographical

areas most likely to be involved and to form a judgment about how these developments will affect us as a nation. We seek from this Commission recommendations

for policy that will enable us to use our technology to fill some of our unmet needs

and to meet our responsibilities as a growing nation.

S. 2623 also provides for a Federal Interagency Committee which would assist

the commission of informed private citizens by making available to them the

resources of the various governmental agencies whose work and responsibilities

are consistent with the Commission's interest. I wish to note at this point that

as section 6 of the bill currently reads, this Federal Interagency Committee would

be chaired by the Secretary of Labor. I would like to draw your attention to a

change that has been made in the clean House bill, H.R. 11611, which, upon the

recommendation of the Secretary of Labor, was amended to read that both the

Secretaries of Labor and Commerce would serve as cochairmen of the Interagency

Committee. In my view this change was important in that it recognized not only

the close relationship that has grown between these two agencies of Government

in facing the problems germane to this bill, but also because it reflects the concern

of the Commerce Department, whose mandate is to promote and foster the

domestic and foreign commerce of the Nation. Such a mandate cannot be fulfilled if the economy does not surge forward by utilizing all its technical knowledge.

In connection with cochairmanship of the Federal Interagency Committee, I

should like to suggest an amendment to section 9 which now provides that the

Secretary of Labor shall furnish administrative services (including personnel) to

the Commission. I think it would be desirable to have both the Secretaries of

Labor and Commerce furnish administrative services. Of course, the two Departments would jointly work out arrangements for furnishing such service.

Two other changes have been made in the clean House bill which I am pleased

to endorse. First, the name of the Commission has been changed from "National

Commission on Automation and Technological Progress" --. al Commission on Technology, Automation, and Economic Pro , VII t er scope

appears desirable, for the problems of change in . i. ases, the s hether

they arise from automation as usually defined 

T

fro ader forms of p ., ess. ,

Second, the original bill provides for recomm nda s by the CorArnis

administrative and legislative steps to be taken the FederWrover 

as to

l ent.

The clean bill provides that the Commission shall a recvikftend admix' ative

and legislative steps to be taken by State and local g. nrrWrIfs. I wolt dorse

this approach, having long felt that the local envir. 1 ent must be r we to

economic adjustment if Federal programs are to be s ces ful. .

It is gratifying to note that S. 2623 reflects the three , de by.the

President's Advisory Committee on Labor-Management the Secretary of Labor and I cochair. This Committee

'

made up of prominent business

and labor leaders, stated that as a nation we must actively promote and encourage

the most efficient utilization of all our resources, but we must see to it that the

effects of such change are not inequitably shared by our citizens. It was recog-
3390 NATION'S MANPOWER REVOLUTION

nized by all that in striking this balance the Government has a role to play. We recently had an opportunity to test the views of this Committee by convening

conferences across the country on the subject of adjustments to technological change or automation. At each conference we could sense the total agreement between labor and management that indeed this way of looking at economic change

was acceptable to all.

Productivity growth in the economy as a whole is the source of most of out wealth and the principal source of our strength as a nation. We must press for further advances in productivity. Businessmen will look to this Commission to advise us on means of promoting technological advance, in order to increase the Nation's output of goods and services more and more efficiently to the benefit of our overall standard of living.

I am confident that this Nation, with the help of this Commission, will make a. major breakthrough in meeting the human adjustment problem associated with

progress. But at the same time this Commission can perform a signal service by directing a great portion of its energies to the identification of barriers to the introduction of those technical changes that hold such promise for the future.

We know that the technology of the United States is no longer so vastly superior

to the technology of other nations in many product areas. We are in effect in a

technological race with a great many of the European nations and Japan. Our

concern in the Department of Commerce with the promotion of export trade has made us very sensitive to the fact that the slightest hesitation in our ability to produce at high quality and low cost could be painful indeed in the competitive

sense. Our construction and mining machinery industry, for example, exports 34 percent of its total production simply on the basis of the present technologiehl

superiority of the product. The automobile maintenance equipment industry

exports 38 percent for similar reasons. But we know that a nation such as Germany is constantly improving its production technology to meet problems of a

tight labor market, and that this constantly endangers our competitive edge in these, as well as in many other, industries.

We know that certain key industries in this country have been exceedingly slow in building on or implementing new technology currently available to them.

Even within industries there appears to be a wide divergence in the progress of firms. We have collected data for a few selected industries that show that in

many cases the productivity of the more efficient firms may be as much as two to four times that of the least efficient ones. Indeed, we have found that the pro- ductivity of the less efficient firm in some industries is perhaps only 40 to 60

percent that of average in the entire industry.

Let me expand on this for a moment. What we have brought together is data

for a few industries on the value added per employee during the year 1958; value

added is, roughly speaking, the value of shipments less the cost of materials.

Value added per worker among the plants in an industry is a crude index of efficiency, although it may be influenced by some other factors as well. We found,

for example, that in the motor vehicles and parts industry value added per employee ranges from $6,680 to $23,470, with $11,960 for the industry as a whole.

Hence, the more efficient establishments may have a productivity twice that of the

average and 3.5 times that of the less efficient plants. If these less efficient plants wish to match the most efficient in their industry, they would have to increase

productivity as much as 252 percent. Even in the metal-cutting machine tool industry, which is one of our more efficient industries, we have found that about 10

percent of the plants would have to raise their productivity about 137 percent to

reach the level of the more efficient plants.

These data suggest that many firms in this country are not using the latest

production methods. It raises in my mind the serious question of how much

unemployment has been created in particular industries, not by the introduction

of new technology, but by the failure to introduce new technology and thus keep a

firm alive.

The proposed Commission could examine a wide variety of problems which

reasonable men could define as they view the future of this Nation. For example,

how can we determine what is the best allocation of talented scientific people

among space, defense, education, and private activities?

Can new technology help us solve some of our pressing problems in the field

of transportation?

Are we applying all the technology we should in overcoming the limitations

on our present sources of energy and power?

Can technology be of greater assistance in the modernization of our cities?

Is our educational system fully suited to our age of technology?
NATION' S MANPOWER REVOLUTION 3391

Should we do more both through Government and through private trade

associations to urge lagging firms to introduce newer production techniques and

to modernize their equipment?

Would it not be in the national interest to develop a more extensive "early

warning system" which would signal the introduction of new technologies and of

whole new industries, especially if they replace established industries?

How can we provide American industry with more advanced knowledge of

new technologies developed abroad?

What would be the results if we could identify the implications of impending

technological changes on community development programs—on the plant an d

business location factors, on the recreational and health needs, on housing needs,

and on the transportation needs?

Would it not be useful if we could develop information on the age and performance of industrial and commercial equipment currently in use and the state

of diffusion of new techniques in each industry?

These are the kinds of questions that the Department of Commerce would

like to see this Commission consider. It may well be true that we have always

had disparities in our economy, for we progress not in a straight line but in a

series of jagged steps as we reach forward, adjust, and reach for ward again. It

is certainly true that we have always had technological change and the resulting

problems from it, but in my view it has never before been so incumbent upon us

to seek solutions to these pressing problems so that we can continue to grow

and prosper, not in any one segment of our economy and society, but for the

benefit and well-being of all.

I look forward to the prompt establishment of this National Commission

because we are deeply concerned with the questions I've raised; because the

Department of Commerce is responsible for promoting the use of technology for

economic growth and development; and because the President has directed my

Department to explore new ways by which the Federal Government might join

with private business and our universities to speed the development and spread

of new technology.

Secretary HODGES. I should like to say, Mr. Chairman, I appreciate the chance of being here with Secretary Wirtz, and of testifying

on this bill, as we have done before the House. We all know the

Nation is facing a real dilemma. On the one hand, we must have

technological change. Some people have said there is no choice.

You must have automation. It is just a question of how do you handle

it when you get it?

This bill will provide a charter for our Government and for the

members of the Commission to sit down in calm deliberation and try

to work on this important subject. There are other committees

already mentioned in bills, and discussed in the Government, but I

think this particular commission we are talking about would probably

coo-dinate all the rest of them to a point where we would have a

deliberative discussion on the part of these 14 people.

This bill provides for a Federal Interagency Committee, which

would assist a commission of informed private citizens by making

available to them all the resources of the various governmental

agencies.

I notice, as we have discussed previously, section 6 of the bill

currently reads that the Interagency Committee Chairman will be

the Secretary of Labor, and I would like to draw your attention to a

change that was made in the clean House bill 11611, which upon the

recommendation of the Secretary of Labor was amended to read that

both the Secretaries of Labor and Commerce would have a joint

chairmanship here.

Senator CLARK. Mr. Secretary, as I understand it, however, the

principal impact of the bill is to create a commission of 14 members

appointed by the President with the advice and consent of the Senate,
3392 NATION'S MANPOWER REVOLUTION

among persons entirely outside the Government, and the Interagency

Committee to which you refer is merely advisory to this Commission.

Is that right?

Secretary HODGES. That's right. That is correct, sir.

In connection with the cochairmanship of this Committee, I would

like to suggest an amendment to section 9, which now provides the

Secretary of Labor shall furnish administrative services. It is probably better if you have both Departments, Commerce and Labor,

furnishing them, but if it would make it easier for you in handling it

with the other House not to do that, we can work the thing out

together.

Senator CLARK. Now is this cochairmanship acceptable to both you

and Secretary Wirtz?

Secretary HODGES. The Secretary of Labor, as he will tell you

later, recommended in the House that it be made a joint chairmanship. We do serve as joint Chairmen of the President's LaborManagement Advisory Committee, he serving last year, and I am

taking on this year as of the 1st of July.

Two other changes have been made in the clean House bill which

I am pleased to endorse. First, the name of the Commission has

been changed from "National Commission on Automation and

Technological Progress" to "National Commission on Technology,

Automation, and Economic Progress." This larger scope seems

better to us.

Secondly, the original bill provides for recommendations by the

Commission as to administrative and legislative steps to be taken

by the Federal Government. The clean bill provides that the Commission shall also recommend administrative and legislative steps to

be taken by State and local governments. I would endorse this

approach, having long felt that the local environment must be receptive to economic adjustment if Federal programs are to be successful.

And I would like to endorse that particularly, because I think that

we ought to have the State and local government's interest. We

called a meeting some time ago of the representatives of all the

States to discuss this, and I would like very much to see this carried

out.

Now we have made, and I should like to recount them now—the

Labor Management Committee, which Secretary Wirtz and I have

the honor to chair jointly, has made—certain recommendations in

connection with this. They have recognized that automation is a

necessary thing, but they also say that we must pay some attention to

the human side of it.

Productivity growth in the economy as a whole is the source of

most of our wealth, and therefore, we want to look further to more

productivity.

Business will look to this Commission to advise us on means of

promoting technological advances, in order to increase this Nation's

output of goods and services more and more efficiently for the benefit

of our overall standard of living.

I would just like to emphasize, Mr. Chairman, that I think we ought

to take this positive approach of getting a greater, higher standard of

living and greater growth in our economy, at the same time recognizing

the social side of it. I am confident that we can see a breakthrough

on this.
NATION'S MANPOWER REVOLUTION 3393

I would just like to point this out, Mr. Chairman and gentlemen:

That we are not now running as far ahead or as fast ahead of the

other nations as we once were. Following the war, we had a little

advantage. Now they are picking up much of this technology and

automation, and I think that we are going to have to, particularly in

our exports and our world trade, do as much as we can to try to stay

ahead of these other nations, if we are going to compete.

I would like to point out something to you and comment on it just

a minute, before I finish, that exemplifies that it isn't a question of

not knowing in many cases what to do. We have found that the

productivity of the less efficient firms in a single industry varies

sometimes as much as 40 to 60 percent of the average efficiency of that

industry, and it may be over a hundred percent difference from the

top efficient firm in that industry.

Let me expand on this for a moment. We have made a study, and

are bringing it up to date now, of the value added per employee—that

is value of shipments less the cost of materials. We have found that

in the motor vehicles and parts industry, which is for the most part

fairly modern, value added per employee ranges from $6,680 to

$23,470, with $11,960 the average.

Therefore, you see, the more efficient establishments have a productivity twice that of the average, and three and a half times that of

less efficient plants.

If these less efficient plants wish to match the most efficient, in their

industry, they would have to increase productivity as much as 252

percent.

Even in the metal-cutting machine tool industry, which is one of our

more efficient industries, we have found that about 10 percent of the

plants would have to raise their productivity about 137 percent to

reach the level of the more efficient plants.

We want to point these things out, that we can do a lot with what

we already have, and get the emphasis on the part of an objective

citizen's committee for using and dispersing the information we have.

Take all the technical knowledge we get through our defense and

space industry. If we can find some way of reaching the small and

average businessman in industry, that would be very helpful. So, I

would like to close by raising a few questions.

The proposed Commission could examine a wide variety of problems

which reasonable men could define as they view the future of this

Nation. For example, how can we determine what is the best allocation of talented scientific people among space, defense, education,

and private activities?

Can new technology help us solve some of our pressing problems in

the field of transportation?

Are we applying all the technology we should in overcoming the

limitations on our present sources of energy and power—coal, and

the atomic development, and all the rest?

Can technology be of greater assistance in the modernization of

our cities?

• And is our educational system fully suited to our age of technology?

Should we do more, both through Government and through private

trade associations, to urge lagging firms to introduce newer production

techniques and to modernize their equipment?

35-388 0-64-pt. 10-4
3394 NATION'S MANPOWER REVOLUTION

Would it not be in the national interest to develop a more extensive

"early warning system" which would signal the introduction of new

technologies and of whole new industries, especially if they replace

established industries?

How can we provide American industry with more advanced

knowledge of new technologies developed abroad?

What would be the results if we could identify the implications of

impending technological changes on community development programs—on the plant and business location factors, on the recreational

and health needs, on housing needs, and on the transportation needs?

Would it not be useful if we could develop information on the age

and performance of industrial and commercial equipment currently

in use and the state of diffusion of new techniques in each industry?

These are the kinds of questions, Mr. Chairman and gentlemen, the

Department of Commerce is particularly interested in, and we think

that both Commerce and Labor have responsibilities to look at this

thing from the standpoint of where this country is going in its economy;

how can we take care of our people as a whole; how can we compete

abroad; and I think the benefit of advice of a distinguished national

commission under your direction would help us reach some of these

conclusions, sir.

Senator CLARK. Thank you very much, Mr. Secretary.

Senator Randolph?

Senator RANDOLPH. Not at this point, sir.

Senator CLARK. Mr. Secretary, there are a couple of p oints I would

like to raise. We have a letter from the Chamber of Commerce of

the United States, commenting on S. 2623, which, although it was

introduced by Senator Hart, I think is known as an administration

bill; is it not? And I will ask you to comment on the points that the

chamber of commerce, speaking through its legislative general manager, Theron J. Rice, made?

They say first, Commission representation should be equal as

between management and labor. Since the Commission will be

composed of 14 members, 5 members should be selected from industry,

and 5 from labor organizations; 2 members should be experts in the

field of science and technology, preferable academic members; and

the remaining 2 members from the general public.

Could you comment on that?

Or, perhaps you would rather comment on these suggestions of the

chamber of commerce later and in writing.

Secretary HODGES. I would be very glad to do that, to get a list

of them, and give a little more time to it. I think that instead of

tieing it down in the bill, I think, any general direction saying the

Commission shall be representative would be enough in the bill, and

leave it to the President to express it in his appointments, because I

think he could then do the kind of things that would be necessary here.

Senator CLARK. I am going to suggest that the staff furnish you a

copy of this letter from the Chamber of Commerce, and as soon as

may be—because we do want to take up this matter promptly in

executive session—you let us have your thinking.

Secretary HODGES. All right. We will be glad to do that. We

will be glad to have that comment, also.

Senator CLARK. And similarly we have, from Mr. Emile Benoit,

who, as you know, has done a great deal of work in this general employ-
NATION'S MANPOWER REVOLUTION 3395

Hon. JOSEPH S. CLARK,

Chairman, Subcommittee on Employment and Manpower, Committee on Labor and

Public Welfare, U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: Enclosed is corrected transcript of Secretary Hodges'

testimony on July 6 before your subcommittee on S. 2623.

During the course of Secretary Hodges' testimony you requested our comments

on suggestions for amendments to the bill made by the U.S. Chamber of Commerce

and Emile Benoit in their letters of June 29 and June 4, respectively.

The chamber recommendations and our comments are as follows:

1. There is recommended a fairly rigid allocation of Commission members to

various groups. We believe the provision included by the House committee

in its reported bill H.R. 11611, that management and labor be equally represented

with at least two members each meets one of the chamber's chief objectives, that

is, assurance that labor and management will be represented and neither will

dominate the- other on the Commission. Insofar as the chamber's recommendation for allocation of membership to other groups is concerned we feel maximum

flexibility in the appointing authority would be preferable.

2. The chamber recommends a change in the name of the Commission. Aside

from the question of mentioning "automation" the chamber's recommendation

has been substantially adopted in H.R. 11611. However, if your committee

concludes that the recommended name change is desirable, we would have no

objection.

3. With respect to subpena power, if you committee concludes that the Commission should have power to "request" rather than "require" attendance of

witnesses and production of documents, we would have no objection to this

chamber recommendation.

4. We believe that deletion of the Federal interagency committee as recommended by the chamber would be most unfortunate. We believe that an important function of the Commission will be the correlation and analysis of a wealth

of information and statistics already accumulated by Government agencies. The

provision for adequate liaison between those agencies and the Co mmission will

facilitate obtaining this information and will enhance its usefulness.

5. The authority to recommend action to State and local governments is contained in H.R. 11611 as reported.

6. A limitation of $2 million on appropriations is contained in H.R. 11611 as

reported.

With respect to Mr. Benoit's recommendations:

1. Mr. Benoit suggests the abolition of salary limitations for Commission

members. This seems unnecessary and undesirable.

2. Mr. Benoit's suggestion for an industry-labor advisory group would seem to

be taken care of by the provision in H.R. 11611 as reported for equal representation of labor and management on the Commission.

3. With respect to compulsion of witnesses," if your committee concludes

that this is not needed, we would have no objection to providing that the Commission hay "request" rather than "require" attendance of witnesses and production of documents.

4. Although we recognize the possibility that additional time may have to be

allowed for the final report and that permanent policymaking machinery may

prove to be desirable as Mr. Benoit suggests, we believe it would be preferable

to postpone action on this recommendation until the Commission has been organized and has had full opportunity to assess the desirability of this suggestion.

Sincerely,

ROBERT E. GILES.

Senator CLARK. Now, Mr. Secretary, you will recall, because you

testified, that this subcommittee has recently completed a very

extensive study of the problem of unemployment in connection with

automation, technological change, and cybernation, and the other

ment and technological program, at the Graduate School of Columbia

University, some additional situations which I would like to get your

comments on, too.

Secretary HODGES. All right, sir.

(The information requested follows:)

GENERAL COUNSEL OF THE DEPARTMENT OF COMMERCE,

Washington, D.C., July 9, 1964.
3396 NATION'S MANPOWER REVOLUTION

economic forces of invention which are in many ways causing a

revolution in our manpower situation in the United States.

We have issued a pretty comprehensive report, with a good many recommendations. In the course of preparing that report, we called

on you, on Secretary Wirtz, on a number of the other leaders in the administration, for your views.

I wonder if you could tell us what, in your opinion, this Commission

could furnish to the press and the public which is not already made available in the report of the subcommittee.

And please be quite candid, and, if you choose to be, rude.

Secretary HODGES. Well, Mr. Chairman, I know that there are some possibilities of overlapping, as there is great interest on the part of

many groups in this. Speaking specifically to this report, I would not

be able, without looking at it again, to give you a conclusive answer.

I think this Commission of distinguished citizens would do a job of coordinating the various recommendations that have been made

both by your subcommittee and by labor, management, and others.

I think that is the chief virtue of it. We are always inclined to

have overlapping, because with a subject like this, everybody gets interested in, people begin putting in bills, writing reports, and making

comments.

I think that all of these, certainly including your report, will be

helpful. But, I still feel that this Commission, properly staffed, tak- ing a look at all of these, can come nearer giving us the kind of coordination and directing its suggestions to the agencies involved, particularly Labor and Commerce, that will give us a greater appreciation of and a greater control of the various recommendations that

are made. That is my general statement.

Senator CLARK. Actually, a Commission of this sort probably

would do just what you suggest, which is to coordinate work already

done in the field, rather than doing a great deal of independent

research and basic research of its own; would it not?

Secretary HODGES. I think so.

Senator CLARK. You are going to be dealing with members who

don't have full time to give to it. They are working without com- pensation. What you really are wanting to do is to pick their brains,

after they have had an opportunity of considering and coordinating

the work that has already been done by others. Isn't that about it?

Secretary HODGES. That is right, and you would get not only the things you just read here from Professor Benoit and from the United

States Chamber of Commeroe, but also ideas that you are going to get

from other people, and I think this Commission, looking at it objectively, not being tied down as those of us in Labor and Commerce, will give a very clear picture of what it's all about, what the problems are,

particularly if you get comments from people from all walks of life

out in the country.

Senator CLARK. It seems to me that the greater job that needs, to

be done here is the public education job. Not too many of even our

leaders, and certainly not too many of our ordinary citizens, in my

opinion, have a comprehensive understanding of the gravity_ of the

problems which are going to be under consideration if this bill is passed.

Would you not agree with me that one of the primary jobs which

could be done by an executive commission of this sort would be
NATION'S MANPOWER REVOLUTION 3397

to acquaint and to educate the general public in the conclusions which

they might come to?

Secretary HODGES. I would agree thoroughly, Mr. Chairman, and

I would like to add this: If this Commission could point out to our

professional education groups all over the country as to what they

need to do to get in line with, or be ahead of, our problems, it would

be one of the greatest things that could happen.

Senator CLARK. Perhaps you saw this morning's New York Times.

There was sort of a panic button pushed by the physicists, to the

effect that there weren't nearly enough physicists being trained to

meet the needs of our complex society.

This rather amused me, because at a hearing before our Manpower

Committee a couple of years ago, the then head of the American

Society of Physicists told us they don't have any concern, "There

are plenty of physicists, we don't need any more," which is some

indication of the rapid change which is occurring in our dynamic

economy all the time.

I quite agiee with you that the need for more adequate planning in

the manpower field in connection with technology is a very important

thing, indeed.

Senator Randolph?

Senator RANDOLPH. Senator Clark, I appreciate the opportunity

of joining you in the questioning of the Secretary. I call attention

to the Senate bill which is modified in the House measure, section 14.

"Such sums as may be necessary"—that is in the Senate language—

and we would have, according to the House bill which is in the process

of being reported, not in excess of $2 million.

Mr. Secretary, would you comment on that figure?

Secretary HODGES. Yes, sir. It sounds to me as if it would be

plenty. I don't think anybody knows, but I certainly would want

to put a limit of some kind on it. That sounds very good. Secretary

Wirtz may have a different point of view.

Senator RANDOLPH. It seems to me that the figure is too high,

Mr. Secretary, and I just wondered.

Secretary HODGES. It seems to me it is quite adequate. That may

be too much.

Senator RANDOLPH. Now, on page 4, the language of the Senate

bill is, "The Chairman of the Committee shall be the Secretary of

Labor," and it is proposed that the Secretary of Labor and the Secretary of Commerce shall serve as Cochairmen of the Committee.

You envisage no conflict by having Cochairmen? You believe

that this will be a cooperative program?

Secretary HODGES. That is right, and that was so accepted in the

House bill.

Senator CLARK. Will the Senator yield?

Senator RANDOLPH. Yes.

Senator CLARK. I think we ought to provide a proviso in there to

the effect that the present incumbents shall continue to serve in the

offices they now hold, and become Cochairmen.

Senator RANDOLPH. Mr. Secretary, some of us in the Senate have

been brought rather abruptly to the problems in our own States

caused by automation.

Secretary HODGES. Yes, sir.
3398 NATION'S MANPOWER REVOLUTION

Senator RANDOLPH. Some faced it in mining, some in manufacturing,

and now to a greater degree, nationwide, in goods and services, not

only automation, but cybernation.

I am wondering what your comment would be on the fact that in

the 1965 fiscal year, we are going to spend, as a Federal Government,

$165 million—I checked the figure—on the purchase of computers—

nothing but computers.

Secretary Hodges. Yes.

Senator RANDOLPH. I wonder, would you comment on such a

purchase?

Secretary Hodges. Without knowing whether or not it is a good,

practical purchase, I would comment on the general proposition, that

the Federal Government, if it is going to stay modern, will have to

buy a lot of computers.

That is what is happening in all of the basic industries, whether it

is banking or services or whatnot, so I would say that the basic

idea is sound. I wouldn't comment on this particular purchase.

Senator RANDOLPH. Well, when I read of this purchase, I attempted

to find what the displacement of manpower would be in the Federal

agencies by the installation of these machines, and I will place that

in the record, agency by agency.

Secretary HODGES. All right, sir.

Senator RANDOLPH. Thank you.

(The information requested follows:)

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET,

Washington, D.C., February 17, 1964.

Hon. JENNINGS RANDOLPH,

U.S. Senate,

Washington, D.C.

DEAR SENATOR RANDOLPH: AS I informed you following OUT White House discussion of the subject, I asked my sta to obtain estimates of the number of

Federal employees that might be displaced in fiscal year 1965 due to the use of

electronic computers. The attached table gives these estimates.

We asked the agencies that will be using computers in fiscal year 1965 to supply

their present estimates as to the number of employees the computers would displace. We asked for the number of displacements that would occur during the

year and whether the computers involved were installed in 1965 or in earlier years.

So that these figures can be viewed in relation to the overall change in the agency's

employment, the attached table also indicates the estimated total employment

for each agency as of the start and the end of the year.

The number of persons displaced does not mean that these employees will be

dismissed by the agency. With few exceptions, displaced persons are assigned

to other jobs. Often these reassignments involve better positions and better pay.

Some are placed in new jobs in connection with the operation of the computers.

Others are assigned to more important and more productive activities made possible by the use of the computers. Normal attrition within the agency makes it

possible to place many in other positions that become vacant. A number are

placed in new programs that are being undertaken. Still others are assisted in

finding—or find by themselves--positions in other agencies where new programs

or normal turnover make employment possible.

I don't mean to imply that displacement due to computer utilization is a minor

problem. It is a very important problem for the employees and for the agencies

concerned. However, the attention the agencies have been giving to it has greatly

reduced the potential hardship on employees. The Bureau has underway a comprehensive study of the general management of automatic data processing equipment in Government. The Civil Service Commission is making a related detailed

study of the problem of personnel displacement in connection with the use of computers. The results of these studies should be available by the end of June. We

hope the studies will reveal ways in which the Bureau and the Commission will
NATION'S MANPOWER REVOLUTION 3399

be able to give the agencies greater guidance and assistance in alleviating the

adverse effects of personnel displacement.

Sincerely,

KERMIT GORDON, Director.

Displacement of personnel during fiscal year 1965 due to the installation of electronic

computers

Department or establishment I

Number of persons to be displaced in fiscal year 1965 only

Estimated employment level as reflected

by the fiscal year 1965 budget

Due to

cornputers

installed

during

fiscal year

1965

Due to

cornputers

installed

prior to

fiscal year

1965

Total

fiscal

year 1965

displacements

On June

30, 1964

On June

30, 1965

Change

Increase Decrease

Interior Department 0 67 67 72, 592 72,774 182 

Tennessee Valley Authority. 0 1 1 18,041 17,650 391

State Department 0 12 12 25, 324 25,320 4

Agency for International Development 0 7 7 16,500 15,700 800

Agriculture Department 0 54 54 116,800 115,376 1,424

Veterans' Administration 0 55 55 172,821 173,554 733 

Railroad Retirement Board 0 85 85 1,920 1,871 49

Social Security Administration_ 0 367 367 35,701 36,347 646 

Commerce Department 11 0 11 34,603 34,945 342 

Small Business Administration_ 6 0 6 3,490 3,490 

Federal Home Loan Bank

Board 15 0 15 1,323 1,323 

Housing and Home Finance

Agency 0 37 37 14, 186 14,894 708 

Treasury Department 0 717 717 88, 100 90,090 1,990 

Post Office Department 300 80 380 593, 100 597,900 4,800 

Federal Communications

Commission 0 7 7 1,600 1,650 50 

Securities Exchange Commission 10 0 10 1,468 1,531 63 

Federal Aviation Agency 260 0 260 46, 400 46,450 50 

Subtotal, civil agencies 602 1,489 2,091 1, 243, 969 1, 250, 865 9, 564 2,668

Department of Defense 0 2,050 2,050 1, 007, 000 989,920 17,080

Grand total 602 3,539 4,141 2, 250, 969 2, 240, 785 9, 564 19,748

I Only agencies reporting displacements are listed. Numerous agencies using computers anticipate no

displacements during fiscal year 1965. Included in this group are the 3 big users; viz, Atomic Energy Commission, National Aeronautics and Space Administration, and General Services Administration.

MARCH 2, 1964.

Hon. KERMIT GORDON,

Director, Bureau of the Budget,

Washington, D.C.

DEAR DR. GORDON: Thanks for your comprehensive letter of February 17

transmitting the useful and revealing compilation on displacem ent of personnel

during fiscal year 1965 due to installation of electronic computers.

Be assured that I am appreciative of your cooperation and of the thoroughness

which is apparent in the report which you have provided as a consequence of

our conversation following the White House briefing a few weeks ago.

In spite of the impact of the computer installations, your letter is reassuring.

As one cognizant of both the benefits of and the problems created by automation, I find encouragement in your assurance that "a comprehensive study

of the general management of automatic data processing equipa ent in Government" is underway in the Bureau of the Budget. It is equally encouraging to

be informed that "the Civil Service Commission is making a related detailed

study of the problem of personnel displacement in connection with the use of

computers." I hope that the results of both of these studies will be rr ade available

to the Subcommittee on Employment and Manpower of the Committee on

Labor and Public Welfare, and to the Committee on Post Office and Civil Service
3400 NATION'S MANPOWER REVOLUTION

as well. As you know, I am a member of those groups and am acquainted with their interest in this subject.

With appreciation and best wishes.

Sincerely,

JENNINGS RANDOM:1H.

Senator CLARK. Thank you very much, Mr. Secretary. We

appreciate having you with us.

Secretary HODGES. Mr. Chairman, I forgot to introduce my

associates. With me are my General Counsel, Mr. Giles, and the

Assistant Secretary for Economic Affairs, Mr. Holton.

Senator CLARK. We are very happy to have them with iis this

morning.

Now, Mr. Secretary Wirtz.

STATEMENT OF W. WILLARD WIRTZ, SECRETARY OF LABOR;

ACCOMPANIED BY EDITH N. COOK. ASSOCIATE SOLICITOR,

AND LEON GREENBERG, ASS:STANT COMMTSSIONER FOR PRODUCTIVITY AND TECHNOLOGICAL DEVELOPMENT, BUREAU

OF LABOR STATISTICS

Senator CLARK. Secretary, we are happy to have you back before

the subcommittee. You are getting to be almost a professional witness before us, and I note that you have, too, a prepared statement,

which I would like to have printed in full in the record at this point,

and then ask you, if you are agreeable, to give us the summary of

your views.

(The prepared statement of Secretary Wirtz follows:)

PREPARED STATEMENT OF W. WILLARD WIRTZ, SECRETARY OF LABOR

Two weeks ago when appearing before this subcommittee I described the three

new great pieces of legislation, the tax, civil rights, and war against poverty bills,

as reflecting a new vision of the American opportunity—the American dream, if

you will.

This vision, this dream, can become a reality and not a hollow mockery if we face squarely today the tremendous economic and social possibilities, for both good and evil, of our onrushing technology.

The National Commission on Automation called for by S. 2623 is designed to help do just that. The subject matter of its mandate is nothing less than the future shape of the economic world and our daily lives, our level of living, our industries ability to compete in world commerce, the strength of our national

defense, and, in a very fundamental sense, the viability of democracy.

Automation and other revolutionary technological advances can be the key to unlimited economic opportunity. They can make real the dream of ending

poverty.

At the same time, these developments include forces which if left unchecked

ean cause hideous blemishes in our society.

Unfortunately the history if economic progress is not always a story of progress for all. Economic progress overall prosperity, is essential, and the maximum use of new discoveries is a vital part of such progress. But it is not enough. The

real issue is not how far or how fast we are advancing on the whole, or on the

average; it is how many people are being left out.

Too many people are being case aside, being left out, today, by the revolutionary

technological changes which are taking place. There is no need for this, and we

cannot permit it to continue. -- -

It is irrportr,nt that "the public"—in the broader sense which distinguishes it -

from "the Governirent"—be involved in the development of a program designed

to apply our, new discoveries for the benefit of economic progress without leaving

those displaced to bear the burden of adjustment.

The proposal for a Natioual Commission on Automation has been conceived

around three central objectives:
NATION'S MANPOWER REVOLUTION 3401

First, to identify technological trends over the next 10 years and appraise their

economic, employment, and social effects.

Second, to access how technological advances can be channeled in directions

where they will promote both economic and social progress and aid in fulfilling

unmet community and human needs.

Third, to recommend the governmental and private action which should be

taken to (a) promote technological change, (b) facilitate occupational adjustment

and geographic mobility, and (c) prevent and alleviate the adverse effects of

change on displaced workers.

The revolutionary nature of much of science and technology today is evident.

The magic of electronic computers is well known. They were originally

developed primarily for military and scientific purposes during and after World

War II. Then they were slowly adapted for civilian use. These great "brain"

machines have been hailed as the salvation of overworked clerical staffs, and

decried as a dire threat to the jobs of white-collar workers.

There is no doubt that these great machines are a force for good. Without

them we would have no earth satellites and no guided missiles. They can remove

the drudgery of human processing of vast amounts of complicated and technical

data.

The first computer was introduced into commercial use only 13 years ago.

Yet is it estimated that about 18,000 general-purpose digital computers are now

in operation—in a great and increasing variety of business, industrial, and scientific

uses. Automated systems control increasing numbers of plants in the chemical,

petroleum, electric light and power, and other industries; and computers are being

installed for data processing in steadily widening areas of business and government.

Laser beams are another amazing development, with both military and social

uses. ' They involve essentially the conversion of light waves into coherent,

high-frequency energy beams that create temperatures higher than those of the

sun's surface.

Though still in its infancy, laser technology is already the subject of extensive

research and development work in such diverse fields as medicine, chemistry,

communications, space exploration, data processing, and national defense.

A laser has already been used as a surgical instrument in operating on the human

eye.

In chemistry, laser beams are expected to create reactions never before achievable, and to provide a ne* tool for controlling processes.

Potential applications aib already foreseen also in guiding missiles and spacecraft, machining metals, making geodetic and weather measurements, transmitting

power in space, and offensive and defensive weaponry.

In metalworking, a major development is numerical control—a way of controlling machine tool operations by tapes. In some advanced examples, a whole group

of tools are combined into a machining center. One operator can perform all

the maching steps needed to complete a part. Labor requirements per piece,

for machine tool operators, machinists, and tool and die makers, could be substantially reduced. Although numerical control has advanced furthest in the machine

tool field, it is also applicable to inspection, welding and drafting.

In the field of communication technology, far-reaching achievements are greatly

enlarging man's ability to overcome barriers of distance and time in transmitting

and receiving information. The most spectacular is the communications satellite

which, according to David Sarnoff, in the May 1964 Fortune, opens the way technically "for the establishment, over the next few decades, of a communication

system by which governments, organizations, or individuals may establish contact

with anyone, anywhere, at any time, by voice, sight, or document, separately or

in combination.'

When linked with television and with increasingly automatic telephone operations, the satellites could have a marked effect on employment opportunities—

possibly opening up new jobs for engineers and technicians and reducing the need

for operating employees and some types of maintenance and installation workers.

These are only examples of what can and needs to be done to apply the infinite

variety of technological developments not only to military and defense purpose,

but also to civilian use and the advancement of human welfare. Here is one great

task on which the proposed Commission can shed light.

We know we cannot stand still. The rest of the world is on the move and we

must move with it, ahead of it. This country's technological and produqtion

skill is basically responsible for the high standard of living we enjoy today. It has

enabled our industries to pay high wages and still meet foreign competition in our

own and world markets. Yet this traditional resource—our advantage in production skill—has been shrinking.
3402 NATION'S MANPOWER REVOLUTION

Many illustrations of foreign technological leadership could be cited. In the glass industry, for example, a revolutionary new development in the flat-glass

process originated in England which produces plate-quality glass at reduced cost. Hants utilizing this process have been under construction in the United States during the past year by two companies holding licenses for the process.

Reports have been received also from experts visiting Europe of highly advanced

technology in such diverse fields as food processing, mechanization of materials handling, and automated trains. Similarly, the Japanese have made technological strides in a variety of fields, including textile and electronics manufacturing and the automation of ships.

Experts do not believe—and I do not mean to imply—that the United States has been outclassed in total production skill. But we do not have as great an. edge of advantage as we once had.

This, too, suggests a vital task for the Commission.

'there is need for continued and intensified efforts to achieve technological

progress—not only in industries and plants which are now laggards in this respect but even in such technologically leading industries as electronics, where unre- mitting effort is required to keep up with the continual rapid advance in tech- nology.

We also know from industries which have long been subject to change, that technological aavances can have drastic effects on workers by reducing the number of jobs and changing their nature.

We are all too familiar with the effects in the railroad industry—a 50-percent drop in employment between 1947 and 1963, with more to come.

We are all Et,,so familiar with the drastic decline in agricultural jobs—from 8.3 million in 1947 to 4.9 million in 1963, a drop of over 40 percent.

As a a. orcl and humane society we must make sure that where workers are displaced by technological advances they are not left to bear the burden alone but are given help to make the necessary adjustment.

The Commission called for by S. 2623 will make recommendations for action in this area.

In addition, our country's great unmet needs constitute a challenge to our technical and social ingenuity, with which the new Commission must be deeply concerned. Whether our children and our children's children will find this

country a tolerable place in which to live will depend, in large measure, on the

progress we make today and tomorrow in solving such basic problems as our in- creasing water shortage (whether by desalinization of sea water or other means) ;

the pollution of the rivers and atmosphere; and the problems of mass transporta- tion, housing, and community facilities which threaten the future of our ever- expanding metropolitan areas.

In all these fields, the contributions of engineering and the natural sciences can be as important as those of the social sciences. The Commission can perform a

unique service by bringing together experts from both these groups to study these fundamental Problems.

The Commission's investigations can have a scope well beyond that of more specialized research efforts by governmental and private research organizations

and can yield a perspective not provided by these separate programs.

I call your attention to the amendments in the bill as reported by the House Education and Labor Committee, H.R. 11611. We have no objection to these amendments. I particularly recommend the amendment which makes the Secretary of Commerce Cochairman with the Secretary of Labor of the Federal Interagency Committee provided by section 6 of the bill. The Secretaries of Labor

and Commerce now serve as Cochairmen of the President's Committee on LaborManagement Policy. Their working relationship on this Committee, and in

fact, throughout this administration has been productive and harmonious. This relationship has been particularly close in dealing with matters in the area of automation and technological change.

In conclusion, I emphasize the conviction that the study and recommendations

of a high-level national Commission will command a degree of public attention

and acceptance which no report or recommendation stemming from an individual

agency of Government or from a private organization could achieve, and will

thereby aid greatly in developing a unified national purpose in this critical area.

The Commission's report will provide a base from which we will be able to _

move to higher levels of effectiveness with programs to promote economic and

socigl progress and justice and to achieve full employment.

We are privileged to live in a time of unprecedented challenge, and of unparalleled hope. As a nation we have taken rightful pride in our proven ability
NATION'S MANPOWER REVOLUTION 3403

to meet new demands, to welcome new ideas, to pioneer in new and creative

solutions to the problems which accompany progress.

The Commission proposed by S. 2623 will greatly aid the Nation to rise to

the challenge we face today. President Johnson has said, no later than June 23,

that enactment of this bill is imperative. I urge that it be established as quickly

as possible to get on with this vital task.

Secretary WIRTZ. Thank you very much, Mr. Chairman. I should

be grateful for the opportunity to file the statement, to summarize

it very briefly, and then to answer whatever questions there are.

There are with me today, Mr. Chairman, and members of the

committee, Miss Edith Cook, Associate Solicitor for Legislation of

the Department of Labor, and Mr. Leon Greenberg, Assistant Commissioner of the Bureau of Labor Statistics.

Senator CLARK. We are happy to have both of you with us.

Secretary WIRTZ. As for your comment about the professional

witness, I trust that this is not one of the two professions or functions

in the world in which the amateur has an advantage over the

professional.

The subject is one which we have discussed here, so frequently,

Mr. Chairman, and members of the subcommittee, that I suppose

I run the peril of repetition on almost anything I might say. That is

only another way of expressing again the appreciation of the administration, and, if you will, of the country, to the members of this subcommittee for having taken the lead in the development of a whole

manpower program.

I don't believe I exaggerate a bit in saying that I think we are

probably 2 or 3 years ahead in the development of a manpower

program as a result of the work of this committee, and the parallel

committee in the House, and I simply want to express the appreciation

of all concerned for that.

Senator CLARK. Well, I know my colleagues appreciate your kind

words but I would like with great sincerity to say that I don't think

we could have gotten out of the batter's box, if it hadn't been for the

cooperation we got from the Department of Labor and the Secretary

in all of our work.

Secretary WIRTZ. Thank you very much.

Now, with respect to the particular bills before you, the two to

which you refer, Senate 2427 and particularly, Senate 2623, I should

like to say only these things. This brings us again face to face with

the possibility that developing technology in this country can be either

of two things.

It has almost a Dr. Jekyll and Mr. Hyde personality. It can be a

terrible curse as far as the development of the country is concerned,

but only if we fail to take advantage of the opportunities which it

presents. It can be, on the other hand, the instrument which permits

man to take advantage of his own wisdom and permits him, if he has

the understanding which goes along with wisdom, to open up all of

the possibilities which science presents to him.

I should like to emphasize the point that I think we have come to

the realization, in the last 2 or 3 years, particularly, that it doesn't

do us any good to measure progress or try to measure progress, on an

aggragative, or overall basis. Rather we should try to determine

how many people are included, and how many people are left out,

of whatever gain takes place. So we come to the proposal to develop

a commission of this kind, as another attempt to solve the equation
3404 NATION'S MANPOWER REVOLUTION

of technology, to see to it that it works for people's advantage and

benefit, rather than to their disadvantage.

You commented earlier about the speed at which these things are

taking place. It came as something of a shock to me to discover

that the first computer—and you referred to the computers which

are being purchased—the first computer was used commercially

only 13 years ago, and the whole development, as far as the computer

is concerned, has taken place in 13 years.

Senator RANDOLPH. It is outmoded now, isn't it?

Secretary WIRTZ. Oh, yes, the original ones are in the museum,

already. This year, there are 18,000 of them installed, one place or

another. Then you look at the most recent development, which is,

I suppose, the use of the laser beam, which can do everything from

tear down a building to perform a delicate operation on the human

eye by the energizing of a light beam and the creation of heat hotter

than the heat on the sun's surface. You realize just from these 

illustrations and from the few others which I refer to in my statement

how fast the whole thing is going.

I was thinking coming over this morning of James Thurber's

counsel that man is simply going too fast for a world that is round,

and that some day there is going to be a great rear-end collision, and

man isn't going to know until too late that what hit him from behind

was man.

I take it it is the function of this committee, it is the function of

the Departments of Labor and Commerce, and it will be part of the

function of this commission, envisaged by this bill, to see that that

does not happen, and there is no reason in the world why it should

happen.

Senator CLARK. One of the things that frightens me grows out of

my reading a couple of weeks ago a book by Dr. George Gallup, the

well-known pollster, acting in a somewhat new role, and suggesting

that man is only beginning to appreciate the capacity of his own mind,

and that we are only using about, perhaps, one one-hundredth of our

mental ability to solve the problems which confront us.

If we suddenly got to using 50 or 75 or a hundred percent of it, I am

afraid we would be in even worse shape than we are now. With the

computer and the undeveloped potential of man's mind, we are moving

pretty fast, and faster every day. You think back in the last 13

years, it is fantastic to me what has gone on in the area under general

consideration which will be under consideration in this Commission,

if the bill is passed. I am sure you have seen it since you have come

to the Labor Department.

Secretary WIRTZ. Yes, and yet in your saying that, I know that

you suggest only the sharing of an excitement about this whole thing.

Senator CLARK. That's right.

Secretary WIRTZ. We would face not only economic stagnation,

but I am sure ultimate boredom, if it weren't for the pace at which

things are moving, and it is only if we are reckless about the misuse

of them that we face any problem.

I agree so completely with Secretary Hodges in pointing out that

these developments are essential to-the promotion of the standard of

living in this country. All of these things are necessary, but it is

becoming clearer every single day that the economy is moving along

lines which could leave out a tremendous number of -people, if we

don't handle it correctly.
NATION'S MANPOWER REVOLUTION 3405

Senator CLARK. Don't you feel in your own experience an accelerating rate of new developments in this whole technological field, and

don't you share my fear that the social sciences will not be able to keep

up with the enormously accelerated progress which appears to be being

made in national physical sciences every day?

Secretary WIRTZ. I do. I have no sympathy with the suggestions

that technology is simply another phase in the developments that

goes clear back to the introduction of the wheel. It seems to me that

our knowledge is right now, developing, if you will, geometrically,

while our understanding is developing arithmetically, to use another

figure of speech.

Wasn't it Solomon who said that we must have wisdom, but above

all, we must have understanding? Our wisdom is developing right

now faster than our understanding. And we have got to catch the

one up with the other.

Senator CLARK. Just for the record, the book of Dr. George Gallup

to which I made reference is entitled, "Miracle Ahead." I commend

it to the audience.

Secretary WIRTZ. Secretary Hodges referred to the advancing pace

of technological development in the rest of the world. I simply want

to reaffirm what he said. I don't think it is true that technology is out

in front in the rest of the world of what it is in this country. In fact,

quite to the contrary. But there is no question about the fact that

the gap is narrowing, and that we have lost some of our monopoly of

wisdom, if you will, some of our monopoly of technological understanding which was one of our resources.

I think that is good. Because what it means, among other things,

is that there will be developing markets abroad for the things that we

produce in this country. That is only one aspect of the fact that in

my understanding of it, advancing technology is absolutely essential

to the achievement of full employment.

Senator RANDOLPH. Secretary Wirtz, a comment at that point, in

connection with the export-import problem, in the overall.

Secretary WIRTZ. Yes, sir.

Senator RANDOLPH. We have been able in the past to compete

against the foreign manufactured goods that moved into commerce

in this country. Our wage scales were at a certain figure, and wage

scales of those countries were at a lower figure. They could move

products into the United States and undersell our manufacturer.

However, we had the know-how; they didn't have it. Now they

have gained the know-how over there, and they have higher wage

scales.

What is the balance? Has this helped or hindered, in the free

flow of goods?

Secretary WIRTZ. I think it helps, Senator. The problem is beyond

my understanding, frankly, and mastery, as a matter of abstract

economics, and I just don't understand it.

• I do understand this much: that in order to achieve full employment in this country, we have got to expand our exports, and we can't

expand our exports without their being a development of the economies

of these other countries so that they can buy these things from us.

Our studies, to the most precise point I can report them to you,

suggest that there is probably a 4- or 5- or 6-to-1 ratio of importance

as between exports and imports, in terms of jobs; or putting it this
3406 NATION'S MANPOWER REVOLUTION

way: Our export potential is, in our understanding of it, six times as

large in terms of jobs as the loss which we will suffer from imports.

I don't think that it can be a one-way street. We can't increase

our exports without accepting some imports, but as nearly as we can

figure out, the potential ratio is about 6 to 1. But I would like to

add this: I think the only way that we can maintain a higher standard

of living in this country than in the rest of the world—especially with

the world shrinking as it is economically, until now nations are closer

together than county seats used to be in terms of time—is by keeping

ahead technologically.

If we simply slowed up on our technological development, while

other nations went ahead, I assume that we would lose the only basis

on which we have been able to maintain an advantage as far as standard of living is concerned. We could not shut out the rest of the world,

as far as its exports or our imports are concerned.

They would immediately shut off our exports, and I say, I think

we would lose on about a 6-to-1 basis on that, so my answer to your

question—I am sorry it is so long—my answer to your question is

that we must continue to move ahead rapidly in terms of technology

development, in terms of efficiency of production, in terms of a mixture of ideas and ideals, in order to compete with the rest of the world.

I am fairly confident that we have got a substantial leadtime right

now in that race.

But it is—excuse me.

Senator RANDOLPH. I will press the point just a little further,

because we do have quota systems on certain imports. You wouldn't

advocate doing away with those, would you, summarily? There are

problems that have to be settled.

Secretary WIRTZ. No, I would not. I think particularly of the

cotton textile matter which has been very much before the Congress

and the administration the last 2 or 3 years, and with respect to

which I had some part in working out a quota arrangement in 1961-62.

I have in mind, too, the problem of the relationship of coal production, for example, and the importation of residual oil. There are

a number of other fairly direct relationships between imported

products and domestic production. I think we have got to look at

each one of those in individual terms.

There is provision for that in the Trade Expansion Act of 1962. I

think the Congress worked that matter out very carefully.

I look forward to the increased strengthening of the economy of

the country, and of the world, in the Kennedy round of negotiations

at the GATT. I would answer your question negatively. I would not

consider any wholesale rejection of the kinds of protection which are

involved. I think that we do have to explore a changing balance of

exports and imports, a developing balance of exports and imports,

frankly, in our own self-interest.

Senator RANDOLPH. Mr. Chairman, I appreciate the Secretary

commenting on something that appears just a little afield, but it is

actually closely related to this subject. In a State such as West

Virginia that produces bituminous coal, and where the, manpower was

reduced tragically, in some instances, too quickly by the mechanization within the mines, our economy was struck another blow by the

importation of a waste material, residual oil, from abroad. And so

you had no cushion of time here, did you, to take care of this problem

in the mining industry?
NATION' S MANPOWER REVOLUTION 3407

Secretary WIRTZ. It came too rapidly in the Appalachian area. I

will put the precise figure in the record, but for purposes of discussion

here, manpower in the coal industry was cut more than half in less

than 10 years. Employment in the bituminous coal mining industry

dropped from 436,100 in 1948 to 193,000 in 1958 and to 127,600 in

1963. And that's a movement, an industrial movement, which is

bound to leave economic waste, deprivation, and poverty in its wake.

When it moves that fast, we have simply got to cope one way or

another with the problems which it presents.

Senator RANDOLPH. Thank you, Mr. Secretary, for your realistic

understanding of our problem.

Senator CLARK. Which, of course, Mr. Secretary, poses a very real

problem for the States, such as Pennsylvania, which has large oil

refineries, and some oil production. It is a very complicated matter.

We have suffered from the enormous decrease in employment in the

coal industry, but we also have our consumer interests, and our oil

refineries to think about, and I am sure you agree with me it is a very

complex problem. There is no easy answer.

Secretary WIRTZ. Yes, sir. Now, I think I will confine my remaining comments to some of the questions which have been raised with

respect to the organization and the function of this Commission, as

such.

I, of course, concur completely with everything that Secretary

Hodges said about the chairmanship of the committee. I proposed

personally at the hearings before the House that the cochairmanship

arrangement be made.

I am less inclined at this point to think that any amendment of

section 9 would be necessary, but I don't think it is an important

matter. I just have the feeling that our experience with the joint

administration of the President's Advisory Committee on LaborManagement Policy offers whatever evidence is necessary, and none,

I think, would be necessary, of the cooperation which exists between

the two departments. That is no problem in this respect any more

at all.

With respect to the composition of the Commission, my answer to

the question that you raised with respect to the suggestion of the

chamber of commerce would be that the form in which the bill came

out of the House, the clean bill, would permit the accommodation of

that position, probably to the maximum extent advisable.

I don't believe that there is great value in emphasizing the institutional character of the membership on the Commission. As we have

increasing experience with these public-private commissions, it seems

to me one of the lessons is that we get the largest advantage from

those, from the participation of those men and women who can rise

above, if you will, institutional representation, and use their own best

judgment in matters of this kind.

I call your attention to the fact that the clean bill from the House

does provide that there shall be at least two labor representatives, and

at least two management representatives.

There could be more, and it does seem to me that the form in which

the bill left the House is probably the best form.

Senator CLARK. Let me say this, Mr. Secretary: My own view,

subject to change, of course, for in the closing days of the session, we

try to acclimatize ourselves, at least to some extent, to the views of
3408 NATION'S MANPOWER REVOLUTION

the other body, I personnally would rather see this wide open, the

way the bill originally came down, because what we want, in my

judgment, are experienced brains, without regard to where they

come from.

Secretary WIRTZ. So would I, as a personal matter, Mr. Chairman,

but it does seem to me that the House committee bill does permit an

accommodation of the various views, and in the interests of simplicity,

it seems to me to offer a good working basis.

Now, you inquired, too, as to the value of. this commission, entering

this field, where there has already been a good deal of work done, and

my answer to that would be very much along the lines of Secretary

Hodges' answer.

It is partly that there are additional emphases needed. It is partly

that this problem is, as far as I am concerned, one in which the more

attention given it by one group or another, the better off we are.

The problem of dealing with cancer—and I don't want to be misunderstood in making the comparison. I have in mind only this part

of the comparison: That the problems of cancer are such that there

ought to be duplicating, intensive research one place or another, to

come up with the right answer.

Now, the difference between cancer and technology is that cancer

is an unmitigated evil. Technology, on the other hand, only presents

that possibility. What we are talking about is the necessity of

guarding against the reckless use of technology, and on that front, I

want to see as many people doing as many different things about it

as possible.

But, in addition to that, the point which is presently left out in our

program of dealing with technology is the enlistment of the public—

in a sense which distinguishes it from the Government—in directing

and focusing a great deal of attention on it. It seems to me a very

good thing to have 14 outstanding public people working on this,

along with the other groups which have it under consideration.

Senator CLARK. I would agree, Mr. Secretary, if you would agree,

on the other hand, that this additional study is nO substitute for

action, and I would hope that the administration would consider

next year, and very carefully consider, the legislative program we will

initiate within this subcommittee based on our own rather comprehensive study.

We would not be confronted with the argument, "Well, we had

better wait until 1966. to see what the Commission has to say."

In my view, this is a matter which would require continuous study

for the foreseeable future, and I would question a little bit the desirability of having an ad hoc commission of this sort, which goes out

of action, goes out of business in January of 1966.

However, we always have to meet the problem of creating another

permanent agency, to which the Congress is usually pretty allergic.

We are going to be faced with having to meet a continuing study

of these programs, as long as you and I are around, aren't we?-

Secretary WIRTZ. I assure you, Mr. Chairman, that we won't wait

until 1966. I assure you of this from the realization that in the last—

what would it be? 8 months?—through the efforts of the legislative

and executive branches, action has already been launched.

The Manpower Development and Training Act has changed to

meet a good many of the problems we are talking about here.
NATION' S MANPOWER REVOLUTION 3409

The tax bill was passed to invigorate the economy, to help meet

the problems we are talking about here.

The Civil Rights Act is by no means unrelated, because it is to

a considerable extent the Negro race which has suffered the impact

of technology, and which is now protected by virtue of this Civil

Rights Act, in some of its parts, against that onslaught.

There will also be the enactment of the poverty bill, I am confident,

within the very near future.

And so I say to you that there seems to me complete evidence in

the extraordinary, really fantastic record of action in the last 8

months, complete evidence that we are not going to wait for a

commission to move ahead in this area.

We will, at the same time, be informed and advised by the work of

this group.

Senator CLARK. I am glad that you take that position.

I will say I think that Secretary Hodges would have said the same

thing,-if I had the wit to think to ask him, but I do know also—and

I am glad that you emphasized it—the enormous importance of the

human factor in this bill and what's going to come out of it.

The bill, to be sure, does provide or on its first page, that it is imperative to identify and describe the impact of technology as an

economic change on production and employment, including new job

requirements, and the major types of work or displacement are technological and economic.

But, actually, this is a bill to help human beings, isn't it, and not

merely just investigate the economy?

Secretary WIRTZ. That is correct.

Senator CLARK. Well, do you have questions?

Senator RANDOLPH. Mr. Chairman. It is my feeling that the

Congress will pass this legislation before we adjourn. That, I am

sure, is the position of the Senate, is it not, Senator Clark? That this

measure will be brought to the Committee on Labor and Public Welfare, and reported to the Senate?

Senator CLARK. Insofar as the chairman has anything to say about

it, the answer is "Yes." Of course, we have to consult our colleagues

on the subcommittee as to their wishes.

Secretary WIRTZ. Would it be appropriate at this point, Senator

Randolph, to make note, too, for the record, that as recently as June 3,

President Johnson indicated his very strong feeling that this is one

of the matters which should be completed at this session of the

Cong7 ess.

Senator CLARK. Let me ask you this, Mr. Secretary, following

along what we have just been discussing. This Commission comes

to an end in January of 1966, under the bill. Do you think that is

enough time?

Secretary WIRTZ. Yes, sir. I would put it under the pressure of a

deadline. And I would like to say on the point that you inquired

about earlier, I don't see how you can spend $2 million on this Commission, and wish that that point could be cleared up.

Senator CLARK. I don't, either.

Secretary WIRTZ. I call attention to the fact that the budget for

the President's Advisory Committee on Labor-Management Policy

has been $300,000 a year. Now, that may be too low, but I should

35-388 0—'64—pt. 10--5
3410 NATION'S MANPOWER REVOLUTION

have some feeling that it is a mistake to put the $2 million in, not

because it is too low, but because it seems to move it too high.

Senator CLARK. Would you be content with an authorization of

half a million dollars?

Secretary WIRTZ. I would not be in a position to advise you

responsibly at this point on that, and would be a little reluctant

to do so. I will be glad to submit a statement for the subcommittee,

being as specific about that as possible.

Senator CLARK. I wish you would do that at your earliest convenience.

Senator RANDOLPH. Mr. Chairman, there is no need for $2 million

to put it at a top figure, is there?

Senator CLARK. I wouldn't think so.

Now, how would you in Labor, and how do you think the people in

Commerce and the other executive agencies, deal with the continuous

research and continuous appraisement which will be necessary after

this Commission goes out of business?

Do you have the techniques, the staff, and setup to continue these

studies?

Secretary WIRTZ. Yes, sir; we have, and I don't answer lightly.

There has been the development within the Department of Labor, in

the Bureau of Labor Statistics, in the Bureau of Employment Security,

in the Office of Manpower Utilization and Training, and in the Policy

Division, there has been the development of a fairly complete program

to follow up in connection with this area.

Mr. Greenberg, who is here, has had a very large role in the development of that program. It includes quite a variety of inquiries and

investigations of one kind or another—everything from surveys of one

sort or another to currently an input-output study which should

illuminate this situation a good deal.

In the Department of Commerce, you have the development of

parallel, but in no way overlapping, agencies. There is the interest of

the other offices of Government, and all of these things have been

coordinated, as you know, recehtly by the establishment of an interagency manpower committee, in which a good deal of thinking, constructive, is going on about being sure that these various programs are

interlocked.

I say, not lightly but deliberately, that there is the capacity to

follow up on the kind of recommendation which should be forthcoming

from this commission.

Senator CLARK. You will recall, Mr. Secretary, this was a matter

in which the subcommittee went into pretty thoroughly in connection

with our report. A number of alternate suggestions were thrown out

there.

Perhaps in due course you will have some recommendations for

legislation on which, of course, we want to get your thinking, when we

are prepared to introduce them.

Does that complete what you wanted to say, sir?

Secretary WIRTZ. Yes. I think it does, except to reaffirm, in conclusion the time factor that is involved in this, and I would like to do

it with one statistic.

As nearly as I can figure out, we are piling up right now between

250,000 and 300,000 boys and girls on a human slag heap every year,

and it is because we have not caught up with the adjustments which
NATION' S MANPOWER REVOLUTION 3411

are necessary to meet technological development. These are boys

and girls who used to come out of school without an education and

find unskilled work.

Now, the machines are taking over the unskilled work. I would

just like to say, as emphatically as I can, that a conservative estimate,

in my judgment, of the delay in meeting the problems of automation

is that we are throwing away 250,000 to 300,000 boys and girls a year.

If the country could understand this, I am sure it would prompt them

to immediate action in this area.

I think the Commission will help in calling attention to that kind of

problem.

Senator CLARK. And to supplement what you have just said, the

inevitable result, it would seem to me, in human terms, is a substantial increase in human delinquency, because these people don't

have jobs.

Secretary WIRTZ. The figure I give you is a figure which is a projection of the juvenile delinquency rates which are going up, the dropout

rates which are not going up, but which 

Senator CLARK. Are not going down.

Secretary WIRTZ. (continuing). Continue, and in absolute numbers,

they may be going up, and there are figures which are of even worse

nature. I mean dope addiction figures, and that kind of thing. If

the country doesn't wake up to what is happening to its boys and

girls who can no lnoger get jobs because they don't have skills, it

will find itself, well, in very bad shape.

Senator CLARK. Well, a lot of this comes from the hopelessness

which overcomes them when they appreciate, because they don't,

have a trained skill, their chances of ever obtaining gainful employment are pretty slim.

Secretary WIRTZ. We have got to break the cycle-40 percent of

the boys and girls who are the beneficiaries today of the aid to dependent children program are grandsons or granddaughters of people

who were the beneficiaries of the aid to dependent children program.

The lack of motivation has set in; it has become inherited through

the slums, and so on, and so forth. We have got to break it someplace.

Senator CLARK. Mr. Secretary, will you let us have your views in

writing on recommendations from the chamber of commerce, as we

asked Secretary Hodges to do?

Secretary WIRTZ. I will supplement my view, but it will be along

the lines that I have indicated here, that the form in which the bill

was passed by the House accommodates that position, I think, to the

maximum extent advisable.

Senator CLARK. I only raised one of their comments. There were

five others. I would like for you to take a look at them, also.

Secretary WIRTZ. I would be glad to do so.

Senator CLARK. Senator Randolph.

Senator RANDOLPH. Mr. Chairman, I would like the record to

reflect that in my opinion, it is unnecessary to have additional hearings

before having the subcommittee meet, and report to the Labor and

Public Welfare Committee, and hopefully for that committee to

send this measure, modified, to the Senate for action. I would hope

that this could be done within the next 2 weeks.

Senator CLARK. I agree with Senator Randolph, but I would like to

hold the record open until Thursday of this week, July 9, in the hope
3412 NATION'S MANPOWER REVOLUTION

that the two Secretaries will be able to furnish the additional information we asked them for.

Then, I would want to call an executive session of the subcommittee

at the earliest possible moment.

Secretary WIRTZ. You would like the additional information by

July 9?

Senator CLARK. Yes, sir; Thursday of this week.

Secretary WIRTZ. It will be here.

Senator CLARK. Thank you very much, Mr. Secretary. We

appreciate as always your very helpful testimony.

Secretary WIRTZ. Thank you.

(The information requested above follows:)

DEPARTMENT OF LABOR,

OFFICE OF THE SECRETARY,

Washington, July 8, 1964.

POD. JOSEPH S. CLARK,

Chairman, Subcommittee on Employment and Manpower,

Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: When I appeared before the subcommittee On July 6

in support of S. 2623, the subcommittee asked for our views on certain recommendations made by the chamber of commerce and Mr. Earle Benoit, of Columbia

University, in letters to the subcommittee dated June 29 and June 4, respectively.

Upon reviewing these recommendations, we have concluded that the form

in which the bill was reported by the House Education and Labor Committee

took these various views into consideration and accommodated them to the

extent considered advisable.

I would like to express again my appreciation of the opportunity extended to

me on Monday to discuss this important bill with the subcommittee.

Yours sincerely,

W. WILLARD WIRTZ, Secretary of Labor.

DEPARTMENT OF LABOR,

OFFICE OF THE SECRETARY,

Washington, July 20, 1964.

Hon. JOSEPH S. CLARK,

Chairman, Subcommittee on Employment and Manpower,

Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: On July 8, I sent you my comments on certain questions

raised by the chamber of commerce with respect to S. 2623.

I also was asked to comment on the level of the authorization appropriation

inserted by the House Education and Labor Committee. Upon further review of

this matter, it is my judgment that it is difficult to estimate the exact, amount

needed, that a limitation should be placed in the bill, and that the House committee figure is certainly adequate. I note in this connection that the authorization is for the life of the Commission, about a year and a half.

Yours sincerely,

W. WILLARD WIRTZ, Secretary of Labor.

Senator CLARK. The subcommittee will stand in recess.

(Whereupon, at 11:30 a.m., the subcommittee was recessed, subject

to the call of the Chair.)
APPENDIX

THE BENEFITS AND PROBLEMS INCIDENT TO AUTOMATION AND OTHER

TECHNOLOGICAL ADVANCES

(Report from the President's Advisory Committee on Labor-Management Policy,

January 11, 1962, Washington, D.C.)

PRESIDENT'S ADVISORY COMMITTEE ON LABOR-MANAGEMENT POLICY

Arthur J. Goldberg, Chairman, Secretary of Labor.

Luther H. Hodges, Vice Chairman, Secretary of Commerce.

Elliott V. Bell, chairman of the executive committee, McGraw-Hill Publishing

Co., Inc.

Joseph L. Block, chairman, board of directors, Inland Steel Co.

Dr. Arthur F. Burns, president, National Bureau of Economic Research.

David L. Cole, attorney and arbitrator.

David Dubinsky, president, International Ladies' Garment Workers' Union.

Henry Ford II, chairman, board of directors Ford Motor Co.

John M. Franklin, chairman board of directors, United States Lines Co.

George M. Harrison, president, Brotherhood of Railway & Steamship Clerks,

Freight Handlers, Express & Station Employees.

Joseph D. Keenan, secretary, International Brotherhood of Electrical Workers.

Thom as Kennedy, president, United Mine Workers of America.

Dr. Clark Kerr, president, University of California.

J. Spencer Love, chairman and president, Burlington Industries, Inc.

David J. McDonald, president, United Steelworkers of America.

Ralph E. McGill, publisher, the Atlanta Constitution.

George Meany, president, American Federation of Labor & Congress of Industrial

Organizations.

Walter P. Reuther, president, International Union, United Automobile, Aircraft

& Agricultural Implement Workers of America.

Richard S. Reynolds, Jr., president, Reynolds Metals Co.

Dr. George W. Taylor, professor of labor relations, Wharton School of Finance,

University of Pennsylvania.

Thomas J. Watson, Jr., president, International Business Machines Corp.

W. Willard Wirtz, Executive Director, Under Secretary of Labor.

Harry Weiss, Assistant Executive Director.

SUBCOMMITTEE ON AUTOMATION AND TECHNOLOGICAL ADVANCE

Clark Kerr, Chairman

David L. Cole

John M. Franklin

Joseph D. Keenan

Thomas Kennedy

David J. McDonald

Ralph E. McGill

Richard S. Reynolds, Jr.

Thomas J. Watson, Jr.

FOREWORD

This report to the President by his Advisory Committee on Labor-Management

Policy deals with the benefits and problems incident to automation and other

technological advances, one of the topics assigned to the Committee for consideration by Executive Order 10918. The report contains 11 recommendations for

accomplishing, by a combination of private and governmental action, the necessary advancement of automation and technological change without detrimental

sacrifice of human values.

This first report has the overall approval of all but two of the Committee's

voting members. The two statements of separate views are included as part of

the report. A footnote to the report records the view of five of the Committee

members regarding the shorter work period issue.

3413
3414 NATION'S MANPOWER REVOLUTION

The first report will be followed by others in the Committee's field of responsibility. Currently in preparation are recommendations concerning free and

responsible collective bargaining and industrial peace, economic growth and

unerr ployment, sound wage and price policies, and policies to insure that American

products are competitive in world markets.

PRESIDENT'S ADVISORY COMMITTEE ON LABOR-MANAGEMENT POLICY,

Washington, D.C., January 11, 1962.

THE PRESIDENT,

The White House, Washington, D.C.

DEAR MR. PRESIDENT: We are pleased to submit the first formal report of

your Advisory Committee on Labor-Management Policy. This report, dealing

with "Benefits and Problems Incident to Automation and Other Technological

Advances," was approved at a meeting of the full Committee today.

When you established this Committee last year, you expressed the hope that

it would 'help restore that sense of common purpose which has strengthened our

Nation in times of emergency and generate a climate conducive to cooperation

and resolution of differences.' It is a source of deep satisfaction to us that this

first report eloquently reflects that "sense of common purpose." There is unanimous agreement among the members on these fundamental points:

1. Automation and technological progress are essential to the general

welfare, the economic strength, and the defense of the Nation.

2. This progress can and must be achieved without the sacrifice of human

values.

3. Achievement of technological progress without sacrifice of human values

requires a combination of private and governmental action, consonant with

the principles of a free society.

This agreement reflects the Committee's conclusion that "automation and

technological change have meant much to our country." The report as a whole

has received the virtually unanimous endorsement of the Committee, while there

are understandably some differences on implementation of these objectives.

Statements of the separate views of two members of the Committee are appended

to the report, and the positions of several members on one particular point are

set out in two footnotes. Because the statement represents a consensus of the

Committee members' views, their individual statements of position on various

points covered would differ in some respects.

It is also a pleasure for us to report that the Committee has met regularly since

it was appointed on February 16, 1961, and that the discussions at the Committee

meetings have been most friendly and constructive. Our experience has demonstrated that your objective of bringing together top leaders of labor, management,

and the public to arrive at a fuller understanding on vital policy issues can be

achieved. We anticipate that recommendations concerning the other major

topics assigned to the Committee—dealing with industrial peace, economic growth,

wage-price policy, and world competition—will be forthcoming in the near future.

We commend to you the substantial public service rendered by the members of

the Committee, who have dedicated themselves to the work ,of the Committee.

Respectfully,

ARTHUR J. GOLDBERG,

Chairman.

LUTHER H. HODGES,

Vice Chairman.

THE BENEFITS AND PROBLEMS INCIDENT TO AUTOMATION AND OTHER TECHNOLOGICAL ADVANCES

Three central propositions have emerged in the committee's consideration of

the significance and impact of automation and other technological alvances.

First, automation and technological progress are essential to the general welfare,

the economic strength, and the defense of the Nation.

Second, this progress can and must be achieved without the sacrifice of human

values and without inequitable cost in terms of individual interests.

Third, the achievement of maximum technological development with adequate

safeguards against economic injury to individuals depends upon a combination

of private and governmental action, consonant with the principles of the free

society.

Automation and technological change have meant much to our country.

Today the average worker in the United States works shorter hours, turns out

more goods, receives higher wages, and has more energy harnessed and working
NATION'S MANPOWER REVOLUTION 3415

with him than a worker anywhere else in the world. Increasingly, machines are

relieving men of heavy physical labor and of dangerous and repetitive work.

Competition in the world markets has been possible against foreign countries

whose standards of living are below our own, though this advantage is diminishing.

Finally, in a world split by ideological differences, automation and technological

change have a tremendous and crucial role to play in maintaining the strength of

the free world.

For these reasons, we emphasize at the outset the imperative need for and

desirability of automation and technological change. Indeed, increased productivity and fuller utilization of resources are urgently needed t') improve our

rate of economic growth. They are likewise needed to improve our competitive

position in world markets. Failure to advance technologically and to otherwise

increase the productivity of our economy would bring on much more serious

unemployment and related social problems than any we now face.

It is equally true that the current rate of technological advance has created

social proolems and that an acceleration of this rate may intensify these problems.

While advancing technology has given rise to new industries and jo5s, it has

also resulted in employee displacement; and the fact that new work opportunities are eventually created is no comfort or help to the displaced individual

who cannot, for one reason or another, secure comparable or any employment.

While employment has expanded in some industries, the net effect of rising

output per worker, of the growing labor force, and of other factors has been an

increase in the volume of unemployment during the past few years—even as total

employment has reached new heights.

The impact of technology on agricultural employment has been particularly

great. Along with other factors, it has resulted in over 1,600,000 workers-20

percent of the total—leaving the farms since 1950. Yet farm output has increased

28 percent, making available to our people an abundance of food, while there was

famine in some of the Communist countries. This increased output enabled this

country to be of substantial assistance to needy people elsewhere in the world.

Our purpose, then, is to seek that course of action which will encourage essential

progress in the form of automation and technological change, while meeting at

the same time the social consequences such change creates.

We recognize that the subject of automation and technological change cannot

be dealt with apart from two broader subjects: increased productivity in general,

and unemployment.

We are preparing a separate report on economic growth, and only note here

the basic importance of such growth to any consideration of the problems—and

the opportunities—automation and technological advance present.

Regarding technological advance and unemployment, it is clear that unemployment has resulted from displacement due to automation and technological

change. It is impossible, with presently available data, to isolate that portion of

present unemployment resulting from these causes. Whether such displacement

will be short run depends to a considerable extent on our ability to anticipate

and plan for programs involving technological change and to make better use of

various mechanisms for retraining and relocating workers who find themselves

unneeded in their former occupations. We have necessarily given general consideration in this report to some aspects of the broader unemployment problem

and to the prospects of more effective use of the work force.

A long stride toward solution of the unemployment problem will be made if we

first recognize the nature of the problem. We regard the following factors as

important in this connection:

1. The recent rate of economic growth in the United States has been insufficient

to reduce unemployment to a tolerable level.

2. The exact extent of unemployment attributable to automation and technological change is unknown, since it is greatly complicated by other factors,

such as:

(a) The economic recession of 1960-61.

(b) The unusually high entrance rate into the labor market, caused by the

great postwar population increase. In the next 10 years it is expected that

there will be a net gain in the labor force of 13 million workers.

(c) Chronic unemployment in distressed areas.

(d) The effects of the rapid advances which have been made by foreign

competitors.

(e) Changing consumption patterns.

(f) The changing nature of jobs which often leaves a gap between job

requirements and qualifications of applicants. During the 1950's there was

a 58-percent increase in the number of skilled technical and professional
3416 NATION'S MANPOWER REVOLUTION

workers. Unskilled workers, with only a limited education, found it more

difficult to get, or hold, a job. In this connection the Department of Labor

projections indicate that unless steps are taken to reduce the dropout rate

among high school students, some 7 million of those new workers joining

the labor force in the 1960's, or more than 30 percent, will not have corncompleted high school, and over 2 million of them wiI1 not even have completed grade school.

(g) Discrimination against workers on the basis of age, sex, race, and

creed.

(h) Multiple jobholding by individuals.

(i) The continuing movement ot workers away from the farms.

3. Public employment service facilities have been inadequate as well as seri- .

ously uneven in tneir etfectiveness with respect to helping workers find new jobs,

counseling them as to the kind of jobs which are liable to be available in the future,

and advising them as to joo prospects in other geographical areas.

4. The mooility of workers is reduced by factors running contrary to the demands of a dynamic society, and an economy in transition.

(a) Tne nontransferabiiity of pension, seniority, and other accumulated

rights may result in an employee's being dependent upon his attachment to a

particular job as the sole means of protecting his equities.

(b) Desirable and essential mobility is affected by reluctance to leave

home—because of personal ties, or because other members of the family may

be working; by the cost of moving and possible losses on local property; and

by the insecurity of jobs in a new locality.

5. Educational and informational facilities have been inadequate in that—

(a) The requirements for general education prior to vocational and professional training have not kept pace with the shift in job opportunities.

(b) The required types of vocational and technical training and retraining

are often not available, e.g., for workers leaving the farm.

(c) There has been an inadequate liaison among school systems, industry,

and government with respect to future job requirements, and in fact there is

insufficient information about the nature of such jobs.

(d) There has been inadequate financial support for needy students.

(e) Counseling facilities have been generally inadequate.

6. Proper retraining facilities, and a system of financial support for workers

while retraining, have been lacking.

These are some of the relevant circumstances of a society in which automation

and technological advance are essential motive forces. The operation of these

forces within the social context creates serious displacement problems—not as a

necessary price of progress but as the stern consequence of failure to recognize and

provide for these problems. We reject the too common assumption that continuing unemployment is an inherent cost of automation.

We believe, rather, that a combination of energetic and responsible private

and public action will permit the advancement of automation and technological

change without the sacrifice of human values, and that such combined efforts

can cope satisfactohly with the total unemployment problem—including whatever part of it may arise from the displacements which result inevitably from the

introduction of new devices and processes.

We do not attempt here an exhaustive exploration or enumeration of all the

ways and means of achieving maximum technological progress with the minimum

of individual disadvantage. Our suggestions can be only representative of a

broader set of possibilities. We recognize, furthermore, that the totality of any

combination of recommendations must be viewed in the light of such relevant

factors as their costs to individual enterprises, their effect on the Federal budget,

and their influence on general price levels.

We recommend that serious consideration be given the following measures:

1. Adoption by the Government and others of policies which will promote a

high rate of economic growth and fuller utilization of resources. A much higher

rate of growth is essential and is the best device for reducing unemployment to

tolerable levels. We will include in our forthcoming report on economic growth

suggestions in this area.

2. Acceptance by Government agencies of the responsibility for collecting,

collating, and disseminating information with respect to present and future job

opportunities and requirements in a rapidly changing society.

3. Cooperation between Government and private organizations in the field of

education in improving and supporting educational facilities to the end that—

(a) New entrants to the labor force will be better qualified to meet the

occupational demands of the future;
NATION'S MANPOWER REVOLUTION 3417

(b) The dropout rate at grade and high school levels will be reduced;

(c) Better vocational, technical, and guidance programs will be available;

(d) Rural and depressed areas, where surplus workers reside, will be better

served;

(e) Financial support will be available for deserving and needy students;

and

(f) There will be a general upgrading in the quality of our education.

4. Acceptance by management of responsibility for taking measures, to the

maximum extent practicable, for lessening the impact of technological change,

including:

(a) Adequate leadtime.

(b) Open reporting to the employees involved.

(c) Cooperation with representatives of the employees to meet the problems involved.

(d) Cooperation with public employment services.

(e) The timing of changes, to the extent possible, so that potential unememployment will be cushioned by expected expansion of operations and

normal attrition in the work force (through separations resulting from retirement, quits, and so forth).

5. Support from both public and private organizations for retraining of workers

who have been and will be displaced.

(a) Private employers and unions faced with automation or technological

changes should make every reasonable effort to enable workers who are being

displaced, and who need to be retrained, to qualify for new jobs available with

the same employer, and to enjoy a means of support while so engaged.

(b) Where it s not possible for the employer to reabsorb displaced workers,

appropriately safeguarded public support in the form of subsistence payments

should be available to industrial and agricultural workers who qualify for

and engage in retraining.

(c) Unemployment compensation laws should be liberalized to permit and

to encourage retraining.

6. Support from both public and private sources, with due consideration to the

circumstances of the enterprise involved, for the displaced worker who is seeking

new employment.

(a) The duration, coverage, and amount of unemployment compensation,

where inadequate, should be increased and made subject to realistic uniform

minimum requirements under the Federal-State system.

(b) Employer supplementation of public unemployment compensation

should be accomplished through severance pay, supplemental unemployment

benefits, and similar measures.

(c) Attention should be given to provision for the special case of the worker

who is displaced during the period when he is approaching retirement.

This may appropriately include consideration of provision for early retirement, through private arrangements of social security measures; but alternative possibilities of more constructive temporary uses of such services

warrant exploration.

7. Support from both private and public sources to the end that a worker's

job equities and security may be protected without impairment of his mobility.

This will warrant consideration, taking into account relevant cost factors, of

such measures as:

(a) Financial aid in the transfer of employees to other plants in a multiplant system, and protection of existing rights for individuals so transfered.

(b) The use of public funds in order to give financial aid in the transfer

of unemployed workers from one area to another where the result will be to

provide continuing employment.

(c) The improvement of public and private protection of pension rights.

(d) The recognition by unions, individual employees, and employers of

the necessity of adapting seniority and other rules in order to facilitate

mobility of workers, while providing protection for the equities of employees.

The committee notes particularly the need for further study and exploration

of this vital area.

8. Vast additional improvement of the public employment service so that it

can effectively place, counsel, and relocate workers both locally and across State

lines. We note with approval the start which has been made in this direction.

9. Vigorous and unremitting efforts by all segments of the population—including Government, employers, unions, and employees—to eliminate discrimination

in employment because of race, creed, age, or sex.
3418 NATION'S MANPOWER REVOLUTION

10. There are pressing national needs to be met, and an abundance of manpower

available to meet these needs. This matching of manpower and national needs,

which is part of the vital context of the automation and technological advance

problem, will obviously be affected by various broader governmental policies.

Reserving fuller consideration of this area for our economic growth report, we

nevertheless note here that:

(a) When technological changes or other factors develop particular pockets

of unemployment, this becomes an additional reason for the undertaking,

particularly at the State and local levels but with Federal assistance where this

is necessary, of public development projects for which there is need, independent of the employment need itself.

(b) Every effort should be made to maintain on an up-to-date and readyto-go basis a schedule of needed public development projects, particularly

those which could be started most quickly and which would be of short or

controllable duration, so that the initation of such projects can in the future

be advanced, and the flow of projects already underway can be speeded up,

if the manpower situation warrants this.

(c) If the operation of the economy, including the effect of automation

and technological change, creates or leaves an intolerable manpower surplus,

consideration should be given to monetary and fiscal measures—including

the possibility of appropriate tax reductions—which would give promise of

helping alleviate this situation.

(d) Governmental action along the lines suggested here, stimulated in

part by the need to meet unemployment situations, would obviously have to

take account of other considerations, including particularly the maintenance

of national economic stability and security. We simply assert, however, the

coordinate importance of stability and growth.

11. The need for goods and services must not be left unfilled, particularly in

a time of international crisis. At the same time, high unemployment is intolerable. In the light of our current responsibilities to meet world conditions, and

in view of our unmet needs at home, we consider the development of programs

directed at the achievement of full employment as being more significant at the

present time than the consideration of a general reduction in the hours of work.

A reduction in the basic work period has, however, historically been one means

of sharing the fruits of technological progress, and there may well develop in the

future the necessity and the desirability of shortening the work period, either

through collective bargaining or by law or by both methods. In connection with

such a development, consideration would necessarily be given to the extent to

which purchasing power could be maintained along with a reduced work period.' 2

We affirm our conviction that the infinite promise of automation and technological advance can be realized without loss or cost of human values. America can

enjoy the fruits of higher productivity without having to accept, as the inevitable

result, serious social consequences growing out of the displacement of workers.

The recommendations made here suggest our view of a broader pattern of

possible courses of action which would necessarily have to be adapted to particular

circumstances, but which permit the constructive and responsible uses of technology and automation. We see no barriers—except misunderstanding, timidity,

and false fear—to the accomplishment of this purpose by a coordination of

private and public programs wholly consonant with the essential concepts of the

free society.

1 Mr. Meany, Mr. Dubinsky, Mr. Harrison, Mr. Reuther, and Mr. Keenan are of the view that this

paragraph should read as follows.

"The need for goods and services must not be left unfilled, particularly in a time of international crisis.

At the same time, high unemployment is intolerable. In the light of our current responsibilities to meet

world conditions, and in view of our unmet needs at home, we consider the development of programs directed at the achievement of maximum output and full employment as most significant at the present time.

However, if unemployment is not reduced substantially in the near future we will have to resort to a general

shortening of the work period through collective bargaining and by law. In connection with such a

development, consideration would necessarily be given to the extent to which purchasing power could be

maintained along with a reduced work period. A reduction in the basic work period has historically been

one means of sharing fruits of technological progress."

2 Mr. McDonald, Mr. Reuther, and Mr. Keenan comment as follows:

"We agree that, in the light of the considerations stated, the most desirable solution now to the problen,

of unemployment is the development of programs which will achieve full employment at 40 hours per week.

Saying that this is the most desirable solution is not, however, the same thing as saying that we have in

fact achieved that solution or that we will in fact achieve it in the near future. And only the fact of full

employment—not a statement of its desirability—can properly serve as the premise for the statement that

the necessity for shortening the work period will only develop 'in the future.' If we fail, as we have so faf

failed, to achieve the most desirable solution we will have to move more quickly than we are now moving

in the direction of shortening the work period."
NATION'S MANPOWER REVOLUTION 3419

We assert the necessity of automation and technological development to the

maintenance of American standards of living and to the fulfillment of this country's

role of leadership in freedom's fight for survival. We assert equally the obligation and the capacity of Americans—as individuals and as a group—to use these

new instruments and methods to enrich the lives of all of us.

We see no reason for alarm if out of a greater sense of common purpose we can

achieve the good will and the determination to act together.

COMMENT BY ARTHUR F. BURNS

I find parts of this report highly constructive, particularly the recommendations

designed (a) to achieve efficient and yet humane management of technological

changes, (b) to improve the functioning of the labor market, and (c) to extend the

coverage and otherwise strengthen the unemployment insurance system. Nevertheless, I am troubled by the report as a whole, and I consider it a dubious guide

to economic policy.

The reasons for my dissent are as follows:

1. The report fails to identify or to analyze or to assess the quantitative importance of the different causes of unemployment. Nevertheless, it conveys the

impression that technological advances are a major, if not the major, cause of

recent unemployment. I know of no evidence to support this view, and I deplore

anything that adds to the greatly exaggerated fears that many people have of

what is loosely- called automation.

2. The report suffers from a failure to link its proposed remedies to the causes

of unemployment. Thus the report does not mention seasonal unemployment

or ways of dealing with it. It does not mention the loss of exports by some industries or the policies needed for coping with this source of unemployment. It

does not distinguish cyclical unemployment from other types or indicate how

public policy for dealing with recessions should be improved. On the other hand,

the report puts heavy emphasis on public works and seems to suggest that this

kind of governmental spending is a good remedy for unemployment regardless of

its cause. Unhappily, public works are poorly suited for dealing with mild

recessions or with local pockets of chronic unemployment.

3. Most recommendations of the report are couched in such vague language

that they may mean much or little, depending on how they are interpreted. But

if experience is any guide, neither the vagueness of language nor the surrounding

qualifications will prevent articulate groups of our society from claiming the

authority of this committee for programs that could prove damaging to our

economy. If all or most of the recommendations were implemented fairly

promptly and on a liberal scale, both employer costs of production and governmental outlays would rise substantially. The report passes over lightly the

question of how such increases would affect business profits or the Federal budget

or the general price level. I find this question very troublesome at the present

time. The deterioration of profit margins during the past decade is already a

serious obstacle to achieving a high rate of economic growth. The protracted

rise of the price level has already put severe pressure on our balance of international payments. This year's projected rise of Federal cash outlays already

exceeds the increase of any peacetime year in our history and, the international

situation being what it is, military expenditures may soon need to be still larger.

In view of these facts, unless great caution is exercised in pursuing programs that

raise costs of production or public outlays, we may find that economic growth

is curbed, that confidence in the dollar is weakened, and that our international

political position is undermined.

4. Apart from these dangers, the report fails to analyze how its recommendations would affect the volume of unemployment itself. The report seems to call

not only for liberalizing the unemployment insurance system, but also for extending private supplements to unemployment insurance, for providing public subsistence payments to workers who undergo retraining, for lowering the age at

which displaced workers can qualify for social security, and for using public

funds to aid unemployed workers in moving to areas where jobs can be found.

I deem it a duty to point out that if all these measures were adopted in quick

order and on a substantial scale, some individuals who now are outside the labor

force will see an advantage in entering it, while there will be others who, having

quit or lost their jobs, will be tempted to take more time in settling on new

ones. In other words, unless great care and caution are exercised in implementing the Committee's recommendations, the end result may well be the social

misfortune of permanently higher unemployment.
3420 NATION'S MANPOWER REVOLUTION

5. In large part, the shortcomings of the report are traceable to the pessimistic

assumption on which it seems to proceed—namely, that there is a serious possibility that our Nation's economic progress will prove insufficient to provide

jobs for all those who are able and eager to work. I have greater faith in our

Nation's future. A tremendous expansion of prosperity lies within our power.

The degree to which we attain it will mainly depend, first, on how much work

people care to do; second, on how productive they wish to be • third, on how

earnestly we pursue public policies to stimulate new, creative, and more efficient

economic activities by business enterprises. If the report had started from this

broad but fundamental premise, it would have dealt more constructively with

the economic and human problem of unemployment.

COMMENT BY HENRY FORD II

I share wholeheartedly the concern over unemployment expressed in this

report, and I applaud this Committee's desire both to speed industrial progress

and to spread its human benefits more widely.

Few things are as costly to our Nation, or as crushing to the human spirit,

as lack of work for those who are willing and able to work.

Because I hold these views so strongly, I feel compelled to state my belief

that this report does not really get to the heart of the matter.

Its major premise is the assumption that automation and technological advance

are in and of themselves significant causes of unemployment—an assumption that

neither history nor an analysis of current unemployment supports. Technological advance has been with us for many generations. But, popular beliefs to the

contrary, technological advance has not been accelerating. Figures from the

Bureau of Labor Statistics show, for recent years, an increase in productivity well

below the average rate for the postwar period and not much different from the

average rate since 1909.

Moreover, the factual evidence strongly indicates that, while automation displaces some individuals from the jobs they have held, its overall effect is to increase

income and expand job opportunities. History teaches us that, by and large,

workers displaced by technological advance have moved rapidly into other employment, ultimately to better paying jobs. This is why we have had rising

personal incomes rather than mass unemployment as new technology has come into

use and productivity has increased.

As Solomon Fabricant has recently pointed out (in his introduction to John W.

Kendrick's "Productivity Trends in the United States") : "Better than average

increases in output were usually accompanied by better than average increases in

employment of workers and tangible capital, despite the more rapid rise in productivity. Correspondingly, less than average increases in productivity were

usually accompanied by less than average increases (or even decreases) in output

and in the use of labor and capital resources. * * * No one concerned with the

rise and fall of industries, or—to single out a currently discussed problem—with

the effects of 'automation' on employment, may ignore these basic facts."

When the economy is prosperous, displaced workers quickly find new employment. This is illustrated by the movement of workers off farms and into industrial

employment when times are good, and the slowdown in this movement when

times are bad.

The committee has recognized that the general problem of unemployment is the

key problem, but its recommendations are concerned mainly with the important

but secondary matters of retraining and mobility. A good employment service

and unemployment compensation facilitate the transfer from one job to another,

but these measures, even if accompanied by massive retraining, relief, and other

social programs, will scarcely make a dent in unemployment when economic

conditions are poor.

If, therefore, we would help persons displaced by technological advance, we

must focus our attention not on relief or even training—though these, properly

conceived and administered, will help—but on creating new jobs for people who

seek them and can perform in them.

When wages rise faster than productivity in the economy, costs will rise and then

either prices will go up or profits will come down—or both will happen. If profits

come down, then incentive to save and to invest savings in new, job-creating

plants, enterprises, and industries must suffer. Moreover, unless inflationary

measures are taken to support the higher wage, cost, and price levels, demand will

not be adequate to maintain production and employment. And, when the integrity of the dollar is at stake, inflationary measures cannot be taken without

calamitous results.
NATION'S MANPOWER REVOLUTION 3421

We must find ways consistent with a free economy to keep wages and other

costs from causing either unemployment or inflation.

I regret that the report does not make this focal problem the primary target of

its comments and recommendations. For, when we have found and placed in

operation those policies and practices that can keep costs from rising and forcing

us into either unemployment or inflation, we will have done much more than could

be accomplished by all other measures combined.

The recommendations in this report are concerned mainly with ways of preventing and relieving technological displacement. I personally endorse many of

them, and the company with which I am associated has long followed practices

similar to many of those recommended in the report.

Nevertheless, I have the following general reservations about the character of

the recommendations:

First, they cannot solve the problem of mass unemployment because they are

directed primarily at helping people to find jobs—not at the basic need for more

jobs.

Second, the massive program of public and private actions called for may have

unexpected consequences that the Committee has not been able to evaluate.

Indeed, I believe that the knowledge and experience necessary to evaluate this

sweeping program do not now exist, and that it is therefore inappropriate and

unwise for this Committee to place its stamp of approval upon such a program.

For example, greatly expanded Federal assistance could very well destroy incentives that stimulate private economic activity and generate individual

initiative.

Third, the endorsement of comprehensive, economywide programs in very

general terms diverts attention from and complicates the search for carefully

selected measures to meet particular problems. For example, I believe that the

main result of a large-scale, nationwide program to retrain the unemployed might

be to impede the development of useful local programs caref ally tailored to

existing job opportunities and the needs and abilities of individuals.

In addition to these general reservations, I have misgivings about some of the

specific recommendations.

With respect to unemployment compensation, I believe that duration, coverage,

and amount of benefits must be increased where they are inadequate. In addition, safeguards to protect against abuses should be strengthened. I do not

endorse Federal standards, but believe the States should continue with responsibility for fitting their particular systems to their own conditions and needs.

I agree that in the main the recommendations for improving our school systems

are good. In many areas and localities, however, the most urgent need is not

more money but greater public concern with what is taught in our schools.

Arbitrarily shortening the workweek in order to decrease unemployment would

be a confession of defeat. Not only a poor remedy, it is also a harmful one, for

it would retard the growth needed for the safety and welfare of our Nation at

this point in its history. We can and should look forward to normal increases in

our leisure time, but they must come as our growing economy can afford them

and not as expedient solutions to unemployment problems.

In summary, I find some things in this report of which I approve, and much

of which I disapprove. Its goal of making certain that high employment accompany technological improvement and increasing efficiency has my full support.

However, I believe that the general direction of its recommendations is not well

calculated to achieve this goal. I believe, too, that the report's basic assumption

concerning the relationship between technological advance and unemployment is

in error.

Therefore, I feel it necessary to say, with reluctance, that I cannot concur in

the report.

EXECUTIVE ORDER NO. 10918—ESTABLISHING THE PRESIDENT'S ADVISORY

COMMITTEE ON LABOR-MANAGEMENT POLICY

By virtue of the authority vested in me as President of the United States, it is

ordered as follows:

Section 1. There is hereby established the President's Advisory Committee

on Labor-Management Policy (hereinafter referred to as the Committee). The

Committee shall be composed of the Secretary of Labor, the Secretary of Commerce, and nineteen other members who shall be designated by the President

from time to time. Of the nineteen designated members, five shall be from the

public at large, seven shall be from labor, and seven shall be from management.

The Secretary of Labor and the Secretary of Commerce shall each alternatively
3422 NATION'S MANPOWER REVOLUTION

serve as Chairman of the Committee for periods of one year, the Secretary of

Labor to so serve during the first year following the date of this order.

Section 2. The Committee shall study, and shall advise with and make recommendations to the President with respect to, policies that may be followed by

labor, management, or the public which will promote free and responsible collective

bargaining, industrial peace, sound wage and price policies, higher standards of

living, and increased productivity. The Committee shall include among the

matters to be considered by it in connection with its studies and recommendations

(1) policies designed to ensure that American products are competitive in world

markets, and (2) the benefits and problems created by automation and other

technological advances.

Section 3. All executive departments and agencies of the Federal Government

are authorized and directed to cooperate with the Committee and to furnish it

such information and assistance, not inconsistent with law, as it may require in

the performance of its duties.

Section 4. Consonant with law, the Department of Labor and the Department

of Commerce shall, as may be necessary for the effectuation of the purposes of

this order, furnish assistance to the Committee in accordance with section 214

of the act of May 3, 1945, 59 Stat. 134 (31 U.S.C. 691). Such assistance may

include detailing employees to the Committee, one of whom may serve as executive

officer of the Committee, to perform such functions, consistent with the purposes

of this order, as the Committee may assign to them, and shall include the furnishing of necessary office space and facilities to the Committee by the Department

of Labor.

JOHN F. KENNEDY.

THE WHITE HOUSE, February 16, 1961.

STATEMENT BY THE PRESIDENT UPON ISSUANCE OF EXECUTIVE ORDER

ESTABLISHING THE PRESIDENT'S ADVISORY COMMITTEE ON LABOR-MANAGEMENT

POLICY

(February 16, 1961)

I am today issuing an Executive order establishing the President's Advisory

Committee on Labor-Management Policy. The Committee is composed of the

Secretary of Labor, the Secretary of Commerce, and 19 other members from the

public, labor, and management. The Secretary of Labor and the Secretary of

Commerce will alternate as Chairman of the Committee for periods of 1 year, the

Secretary of Labor serving during the first year.

The purpose of this Committee is to help our free institutions work better and

to encourage sound economic growtb and healthy industrial relations. The

Committee will study, advise me, and make recommendations with respect to

policies that may be followed by labor, management, government, or the public

which will promote free and responsible collective bargaining, industrial peace,

sound wage and price policies, higher standards of living, and increased productivity. The" Committee has been directed to include among the matters to be

considered by it: (1) policies designed to insure that American products are competitive in world markets, and (2) the benefits and problems created by automation

and other technological advances.

I deem this a most important Committee. It will bring to the great problems

in the fields of collective bargaining, industrial relations, wage and price policies,

and productivity the experience and wisdom of labor, management, and public

experts in these fields.

It is my hope that the Committee may help restore that sense of common purpose which has strengthened our Nation in times of emergency and generate a

climate conducive to cooperation and resolution of differences.

It is my hope that the advice of this Committee will assist the Government,

labor, management, and the general public to achieve greater understanding of

the problems which beset us in these troubled times and to find solutions consistent

with our democratic traditions, our free enterprise economy, and our determination

that this country shall move forward to a better life for all its people.

* * * It is gratifying that I have been able to obtain the participation of such

outstanding persons in the Committee's work. I greatly appreciate the willingness

of these public-spirited citizens to serve their country in this way. The fact

that such highly qualified persons have agreed to be members of this important

Committee augurs well for its success.
NATION'S MANPOWER REVOLUTION 3423

AMERICAN FEDERATION OF LABOR AND

CONGRESS OF INDUSTRIAL ORGANIZATIONS,

Washington, D.C., July 7, 1964.

Hon. JOSEPH S. CLARK,

Chairman, Subcommittee on Employment and Manpower, Committee on Labor and

Public Welfare, U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: In connection with hearings by your subcommittee on

proposals to establish a Commission on Automation, on behalf of the AFL—CIO

I wish to make the following comments to supplement testimony we submitted

on December 5, 1963.

In general we support legislation along the lines of S. 2623, a bill sponsored by

Senator Hart to establish a National Commission on Automation and Technological Progress. This legislation is in line with the resolution adopted unanimously at the 1963 AFL—CIO constitutional convention and it is in line with a

statement issued February 21, 1964 by the AFL—CIO Executive Council.

However, we believe S. 2623 should include a specific authorization of $2

million instead of the present general nonspecified authorization for the Automation Commission. The Commission cannot operate effectively unless it has

adequate funds. Therefore, we ask that a specific authorization of at least $2

million be included in the legislation. Furthermore, we believe that your subcommittee should retain adequate subpena authority in the legislation establishing

the Commission on Automation.

Mr. Chairman, I respectfully request that this letter and the attached AFL—CIO

Executive Council statement be included in the record of hearings by your

subcommittee on legislation to establish a Commission on Automation.

Sincerely,

ANDREW J. BIEMILLER,

Director, Department of Legislation.

STATEMENT BY THE AFL—CIO EXECUTIVE COUNCIL ON AUTOMATION COMMISSION

The time is long overdue for a full-scale national investigation of the social

and economic impact of automation.

Now, before the toll taken by the new technology reaches more drastic proportions, a broadly representative Commission on Automation, composed of the

ablest men in public and private life, should be established to do for America,

what other national commissions have done in the past, in connection with other

serious national problems.

A special Commission is necessary because the American people are confronted with a development which is profoundly changing the nature of our

society. Automation is displacing thousands of jobs each week, while the labor

force is growing at a stepped-up pace. It is destroying hard-earned skills. It is

relocating plants and industries. It is disrupting entire communities. And,

with unemployment at persistently high levels, it is affecting race relations,

labor-management relations, and many other aspects of American life, as well.

For at least a decade, the Government has encouraged and subsidized the spread

of automation. Billions of taxpayers' dollars have been spent to promote the

technological revolution—through increased writeoffs for new plants and machines, the investment credit for new equipment and numerous research and

development subsidies. But there has been little corresponding concern for the

disruptive and dislocating effects of automation on workers and their communities.

An Automation Commission could begin to establish the needed balance

between the fast-moving technological revolution and the adjustments to automation that American society must adopt, if it is to endure without vast disruption. It could help create a more general awareness of the human consequences

of technological change and do much to make such change smoother, more

orderly and humane.

Such a Commission could stimulate study on important aspects of the problem

which have not yet been sufficiently explored. It could promote the establishment of new institutions, such as a technological clearinghouse, to gather information about impending technological changes far in advance of such changes, and a

Federal Information and Guidance Service to assist unions and employers in the

development of collective bargaining solutions to the problems of automation. It

could recommend the kinds of over-all economic policies, both private and public,

that would make the new technology consistent with the goals of the Employment

Act of 1946. It could examine the training, worker relocation, investment, and
3424 NATION'S MANPOWER REVOLUTION

other programs adopted by nations abroad to meet similar problems and determine which of these could be usefully applied in the United States. In addition, it could coordinate and unify the efforts of various Government agencies now

dealing with parts of the problem.

Given the freedom and willingness to "pioneer in the social, political, and economica spects of automation to the same extent that our science and industry

have pioneered in its physical aspects," as the late President Kennedy suggested, a

Commission on Automation, broadly representative of the major groups in our

society, could help America realize the great promise of the new technology, while

avoiding the kind of social havoc which followed in the wake of the first industrial

revolution.

We therefore urge the prompt establishment by Congress of a Commission on

Automation, composed of top leaders in industry, labor, and the executive and

legislative branches of the Federal Government. The Commission should be

empowered to take testimony under oath and subpena witnesses and should have

an adequate appropriation for the employment of counsel and staff. The extraordinary and pressing nature of the need for jobs requires this action.

CHAMBER OF COMMERCE OF THE UNITED STATES,

Washington, D.C., June 29, 1964.

Hon. JOSEPH S. CLARK,

Chairman, Employment and Manpower Subcommittee, Labor and Public Welfare

Committee, U.S. Senate, Washington, D.C.

DEAR SENATOR CLARK: The Chamber of Commerce of the United States of

America supports establishment of a study commission, as contemplated by S.

2623 which would set up a National Commission on Automation and Technological

Progress. We believe such a study commission could gather useful information.

To make S. 2623 more effective and to give the findings of the Commission the

respect and recognition they deserve, we recommend the following improvements

in the bill:

(1) Commission representation should be equal as between management and

labor. Since the Commission will be composed of 14 members, 5 members should

be selected from industry and 5 from labor organizations. Two other members of

the Commission should be experts in the field of science and technology, preferably

selected from the academic field. The remaining two members should be selected

from the general public.

Commission members should also be appointed from among persons recommended by recognized organizations in the respective groups listed above. This

is the procedure followed under the Welfare and Pension Plans Disclosure Act

and in other instances where advisory groups are established and has proved to be

equitable and satisfactory in practice.

(2) The Commission should be named the "National Commission on Technological and Economic Progress," deleting the word "automation," which,

unfortunately, is a much-maligned word. Labor officials, for instance, have

labeled it "the curse of the country." On the other hand, others have cited

facts to support the conclusion that the benefits of technical change are such that

public policy should foster it rather than shun it. Accordingly, it is our view

that it would be preferable if the term "automation" were deleted and the body

called, "The National Commission on Technological and Economic Progress."

(3) Because the legislation gives unnecessarily broad authority to the Commission to issue subpenas, section 10 should be modified to give the Commission

power to "request" rather than "require" the attendance of witnesses and production of relevant documents.

(4) Section 6, which establishes a Federal interagency committee, should be

deleted. If such a committee were created to "advise" and "maintain effective

liaison" with the Commission the staff of the various agencies involved would be,

in effect, ex officio members of the Commission and would tend to lessen its

independence.

(5) Commission functions, as detailed in section 1(e), should be amended to

give the Commission authority to recommend action by Federal, State, and local

governments rather than the Federal Government alone. If Commission recommendations are restricted to action by the Federal Government, it implies that

only the Federal Government is capable of dealing with the problem of technological progress. State and local governments also have a responsibility in this area.

(6) Section 14 should provide a limitation on the amount of funds authorized

for work of the Commission.
NATION'S MANPOWER REVOLUTION 3425

We reiterate our support of the objectives of S. 2623. It is a recognition by

Congress of the importance of technological change in our growing economy.

With the amendments above, this study can be of value in meeting the challenges

of a changing economy.

Sincerely yours,

Senator CLARK,

U.S. Senate,

Washington, D.C.

DEAR SENATOR: Automation and its displacement of workers is of great concern to the Office Employes International Union. This organization does not

oppose automation with its resulting increased productivity, but it does believe

that reasonable safeguards should be instituted so as to minimize the effect upon

all segments of society.

We in this union have had considerable experience with this technological

change and have viewed its effects first hand. For this reason, we earnestly

urge your favorable consideration of the following statement and suggested course

of action adopted by the executive board of the Office Employes International

Union:

"The executive board of the Office Employes International Union, AFL—CIO,

meeting in New York City, June 8-12, 1964, urged Congress to immediately

pass legislation recommended by President Johnson to set up an Automation

Commission.

"The executive board believes that this legislation should not be delayed.

It is essential that a tripartite Commission be established to conduct an intensive

study concerning the effects of automation on the economy, particularly with

respect to the dislocation of labor.

'The executive board also urges that the Commission be authorized to set up

guideposts, regulating the introduction of automotive equipment which may

further displace manpower.

"It is unanimously agreed that machines are eliminating jobs at a rapidly

expanding rate. Little or no thought has been given by business, in general,

to the social and economic implications particularly with respect to the loss of

consumer purchasing power as unemployment increases.

"Our Government regulates the sale of securities, acts to prevent monopolies,

licenses, patents and assumes numerous regulatory powers. Our States have

full control over the pricing policies of utilities and regulates banks and insurance

practices.

"Aimless automation can cause widespread unemployment, render large numbers of workers obsolete, and cripple consumer purchasing power.

"A National Automation Commission should be created and should be given

adequate regulatory power immediately if we are to prevent national chaos."

Very truly yours,

J. HOWARD HICKS,

Secretary-Treasurer.

THERON J. RICE,

Legislative General Manager.

OFFICE EMPLOYES INTERNATIONAL UNION,

Washington, D.C., July 1, 1964.

INTERNATIONAL ASSOCIATION OF MACHINISTS,

Washington, D.C., June 9, 1964.

MR. EDWARD D. FRIEDMAN,

Counsel, Subcommittee on Employment and Manpower, Committee on Labor and

Public Welfare, U.S, Senate, Washington, D.C.

DEAR MR. FRIEDMAN: This will acknowledge your letter of June 2, 1964,

together with enclosures S. 2427 and S. 2623, proposals to establish a Commission

on Automation and Technological Progress which were not introduced at the time

of my appearance before your subcommittee on the general subject of automation

and technological change.

From my analysis of the proposed bills, it is evident that the measure introduced

by Senator .Hart, namely, S. 2623, would, if enacted, provide for the broadest

consideration of this very real problem which confronts both the labor movement

and industry today. Therefore, for the consideration of the subcommittee,

35-388 0-64-pt. 10-6
3426 NATION'S MANPOWER REVOLUTION

please accept this letter as endorsement of Senator Hart's proposal, with the

sincere desire that such legislation be reported to the Senate for final adoption.

Because of the fact that the problems of automation have been of deep concern

ever since the close of World War II, we are in need of the speedy enactment of

this authority to establish such a Commission without delay, particularly to meet

the needs of manpower changes, unemployment and the effects of automation on

our gene' al economy.

With best wishes, I remain.

Sincerely yours,

Mr. EDWARD D. FRIEDMAN,

Counsel, Subcommittee on Employment and Manpower,

U.S. Senate, Washington, D.C.

DEAR MR. FRIEDMAN: Thank you for your letter of June 2 requesting supplemental comments on the modified proposals recently introduced by Senator

Humphrey and Senator Hart.

As I indicated in my earlier testimony before the Senate Subcommittee on

Employment and Manpower, United Aircraft is very interested in the committee's

investigations into the applicability of new technology to the civilian economy

and is equally concerned with the effect on our communities, manpower, and enterprise of any sudden conversion to a purely civilian economy. Last November we

endorsed the bill introduced by Senator Hart, because we felt that the establishment of a Commission to consider this broad problem area thoroughly could serve

a most useful purpose. We have no reason today to modify that opinion.

It does seem to us, however, that a considerable number of commissions, committees, and studies are being proposed or developed in various agencies of the

Government to look into one or more phases of these broad and related problems.

We believe that perhaps a consolidation of the various bills now pending into one

which retains the more desirable features would serve to unify this effort and

establish a single Commission which would have the necessary authority and

stature to view these problems as a whole, to study their many interrelated facets,

and thus to define more clearly desirable national goals. We do not feel we are

in a position to comment in any meaningful way on the specifics of the modified

proposals which you enclose.

Sincerely,

A. J. HAYES,

International President.

Mr. EDWARD D. FRIEDMAN,

Counsel, Subcommittee on Employment and Manpower,

Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR MR. FRIEDMAN: In response to your letter of June 2, I shall make only

a few brief comments on the two bills, S. 2427 and S. 2623, both of which propose

establishment of a Commission on Automation.

My preference is for the latter measure. As I see it, the heart of that bill lies

in section 1(e) which charges it to make specific recommendations for legislative

and administrative actions dealing with the effective channeling of technological

developments and facilitating adjustment to them. Section 2 establishes the

Commission to carry out that central function. This differentiates the proposed

Commission from the several previous investigations of the impact of automation

which have been conducted under Government auspices. In effect, Congress

would be convoking a Commission of experts to review a knotty problem area

and then to advise it as to how governmental responsibilities in that area can

best be met. The report of the Commission is not simply "another" report but a

coordinated program presented to Congress for possible action.

If I read the intent right, then I much prefer the Commission organization of

S. 2623 over S. 2427. The Commission of 14 nongovernmental experts is a more

suitable investigative body than a Commission of 32 inclusive of governmental

officials and legislators. At the same time the advisory Interagency Committee

UNITED AIRCRAFT,

East Hartford, Conn., June 9, 1964.

H. M. HORNER, Chairman

YALE UNIVERSITY,

New Haven, Conn., June 15, 1964.
NATION'S MANPOWER REVOLUTION 3427

insures that the knowledge and experience of governmental agencies is fully

utilized, without giving them the power to "protect" agency positions.

With the careful selection of the right personnel, with an appropriate emphasis

of the grave responsibility being entrusted to them to review present and potential

contributions of the Federal Government and how these can best be coordinated

with the efforts of local government and private organizations, this Commission

would have the possibility of taking us a good step forward in this important area.

Sincerely,

NEIL W. CHAMBERLAIN,

Professor of Economics.

NEW YORK STATE SCHOOL OF INDUSTRIAL AND LABOR RELATIONS,

CORNELL UNIVERSITY,

Ithaca, N.Y., June 11, 1964.

MT. EDWARD D. FRIEDMAN,

Counsel, Subcommittee on Employment and Manpower,

New Senate Office Building, Washington, D.C.

DEAR MR. FRIEDMAN: This is in response to your request to amplify my

testimony before the Senate Committee on Labor and Public Welfare with regard

to Senate Joint Resolution 105 and S. 2298 by commenting on bills S. 2623 and

S. 2427. Before discussing the bills in particular, I would like to note that I

perceive one of the major missions of the Presidential Commission on Automation

to be that of bringing national attention to problems arising from automation.

The committee should not necessarily be charged with prescribing legislation

nor should it have to determine whether the private or public sector or some

combination should assume the responsibility for solutions. The statements of

such a committee should indicate the seriousness of certain problems, and while

there will definitely be implications for legislation, their recommendations should

not be so focused that they imply that Federal legislation is seen as the only

means of ameliorating the problems. If the recommendations are too oriented

toward legislation, it is possible that many segments of the public might ignore

the problem because they disagree with the solutions.

Because I hold the above objectives for such a Commission, I feel that the

group should be constituted primarily of persons outside of the Government.

Such a group theoretically would not have vested interests in certain programs

of action, and might have a somewhat broader perspective than a committee

composed primarily of members of the Government who might be prone to

examine the problem of automation from the point of view of required Federal

legislation. The general outline of bill S. 2623 is in keeping with this orientation.

This bill has the added merit of establishing a form of coordination among the

various governmenta.,1 agencies concerned with this problem. I would like to

suggest that the chairman of the proposed Federal Interagency Committee be

at least an ad hoc member of the Automation Commission so that he might better

accomplish his task of maintaining effective liaison between departments and

agencies and the Commission.

If the bills could be combined, I think the notion of advisory panels to a commission would be extremely important and useful and could still be provided for

within the framework of bill 2623. This outside assistance seems to be provided

within bill S. 2623, through section 11, which authorizes the Commission to

negotiate and enter into contracts with private organizations.

If the concept of advisory panels, as indicated in section 3 of bill S. 2427, is

maintained, I think it most important that panel members be drawn from Government. However, I would prefer to see more flexibility in terms of the type of

competence required in order to be made a member of such a panel. In its

present form, section 3 indicates that commissions may establish advisory panels

which will consist of persons with exceptional competence and experience in the

fields of science and technology, economics, political science, or operations analysis. A strict interpretation of this clause would preclude the inclusion of individuals in the fields of psychology, sociology, and many areas of education. I

would prefer that no restrictions be placed on who should be members of the panel

other than they should be individuals of competence and experience. If not,

I would suggest that the lines 4 through 6 referring to section 3 read as follows:

"The Commission may establish advisory panels which will consist of persons with

exceptional competence and experience in the fields of behavioral or physical

science and technology." This could incorporate economics and political science.

I do not know whether it is necessary to have an equal balance, as implied, with
3428 NATION'S MANPOWER REVOLUTION

regard to representation from Government, private industry, and nonprofit educational or technical institutions, but I feel that it is only necessary to have

these various sectors involved in each panel. If the Automation Commission is

to be formed primarily of nongovernmental people, I would recommend that

Members of the Senate and the House of Representatives be added to such panels. There are many Members from these two bodies who have considerable expertise in the related problem areas. Their continued participation in the panels would give them even more information to draw upon in framing legislation.

Bill 2427, seemingly, places a greater focus on the defense industry and the possibility of conversion than does bill 2623. While this area is not precluded in the broader directives of bill 2623, it is not specifically indicated. I think this is a very important problem which could become the focus of one advisory panel

if the concept of advisory panels were included in the framework of bill 2623. Finally, I note that both bills assume that a knowledge of current technological

developments will enable a better prediction of manpower requirements. I

assume that giving the Commission the power of subpena infers that certain

organizations will be reticent to divulge their plans with regard to technology.

I feel that even if the Commission were to receive full information in this area, it would still not be able to make more than gross assumptions about. manpower

requirements.

My own interpretation of advancing technology is that nearly all technological

forms will require a viable, flexible educational system to handle the problems

of recruitment or retraining. Because of this interest in education, I am opposed

to the idea that the Commission be limited to considering problems that will occur

within a span of 10 years. I feel quite sure that we can't. accurately forecast the

advance of technology even on a 10-year basis. However, the implications for education and mobility in other areas are such that even 10 years is too limiting

a focus for looking at problems and solutions.

Sincerely,

Mr. EDWARD D. FRIEDMAN,

Counsel, Subcommittee on Employment and Manpower,

U.S. Senate, Washington, D.C.

DEAR MR. FRIEDMAN: I deeply appreciate the opportunity given me by your letter of June 2, 1964, to comment on S. 2427 and S. 2623 and expand on my testimony of September 20 and November 15, 1964.

To summarize my continuing view, I would like to make three points:

1. Public policy on automation must consider the total scope of social

consequences and should encompass action by private as well as governmental (legislative and executive) entities.

2. Such action can only be helpful ultimately in ameliorating the problems

and dislocations caused by technological change, if such change is encouraged

at the same time as the social response to it is guided to maximize human benefits and minimize individual limits.

3. Governmental and private action must have followthrough: it cannot be on a one-shot basis.

My comments on the bills before your committee are made in the light of the above.

S. 2427

1. It provides for legislative and executive branch representation on the Commission. Possibly the legislative representation should be on air ex officio basis, as o rought out in testimony. Possibly the executive branch representation

should also be ex officio, as suggested in Senate Resolution 105.

2. The first sentence in section 1 states positively the need for technological

progress—as does the beginning of Senate Resolution 105.

3. Section 1 (e), (f), and (g) supports the above statement with specific guidelines—as does section 1 (c), (d), and (e) of S. 2623. Perhaps some combination

could be made in terms of assuring followthrough. I note that all bills call for

a final report. Perhaps provision should be made for more continuing, broadly

based guidance—not only labor-management oriented guidance as now provided

by the President's Advisory Committee.

LAWRENCE K. WILLIAMS,

Assistant Professor.

THE DIEBOLD GROUP, INC.,

New York, N.Y., June 22, 1964.
NATION'S MANPOWER REVOLUTION 3429

In this connection I should like to commend the provision for support of local,

regional, and industrywide committees, as recommended in section 6(a) (3) of

S. 1302, introduced by Senators Javits and Cooper and printed on pages 2902-

2911 of the hearings. Perhaps some such provision could be made under section

3 of S. 2427, if the Commission could have a more long-term status.

I hope that these comments may prove helpful to the committee.

Sincerely,

JOHN DIEBOLD.

Mr. EDWARD D. FRIEDMAN,

Subcommittee on Employment and Manpower,

U.S. Senate, Washington, D.C.

DEAR MR. FRIEDMAN: Thank you for your letter of June 2 requesting my

comments on S. 2427 and S. 2623. Both these bills seem to me extremely worthwhile and likely to make a major contribution to the national welfare if passed.

Of the two, I would prefer S. 2623, the Hart bill, because it provides for a smaller

Commission and one that is chosen on an individual basis by the President rather

than as representatives of various Government agencies and interest groups.

It seems to me highly important that this subject be studied in a dispassionate way

as free as possible from vested interests and prejudices. I also find the higher

salary allowed to Commission members essential for obtaining persons of the right

caliber and I would personally favor removing all specific salary limitations from

the bill so as to permit the Commission to draw upon persons from business and

the professions and to pay them roughly what they had been earning before.

I think the Hart bill is wise in establishing an Advisory Federal Interagency

Committee consisting of the heads of interested Departments, or their designees,

as such liaison and advice will be most important. I believe it would be similarly

advantageous to establish a second advisory board comprising representatives of

industry and labor organizations.

With respect to section 10 of the Hart bill, I am glad that the specific mention

of subpena powers has been omitted, but the language still implies the possibility

of compulsion of witnesses, the necessity of which I still fail to understand.

Section 11 authorizing contracts with private organizations seems to me highly

advisable, as does section 12, attempting to assure the Commission the cooperation

of various Government agencies.

I question whether it is a good idea to impose such short time limits on the final

report in view of the magnitude of the studies likely to be required and the enduring

nature of the problems being studied. In my view, a continuous, or at least

intermittent, study of these problems and the establishment of a permanent

policymaking machinery will ultimately be necessary. I suppose, however, all of

this can await the action which will be taken on the basis of the Commission's

report so that there is not too much harm in setting in advance what seems like

an unrealistic terminal date for the Commission's activities.

Sincerely,

COLUMBIA UNIVERSITY

IN THE CITY OF NEW YORK,

New York, N.Y., June 4, 1964.

EMILE BENOIT.

SUPPLEMENTAL STATEMENT BY BEN B. SELIGMAN, DIRECTOR, DEPARTMENT OF

EDUCATION AND RESEARCH, RETAIL CLERKS INTERNATIONAL ASSOCIATION

AFL—CIO

We welcome this opportunity to comment further on the proposals to establish

a Presidential Commission on Automation as embodied in S. 2427 and S. 2623.

We have presented our views earlier on the same matter to this subcommittee

which were reproduced in its hearings, part 9, pages 2343, 3325, and following

pages. That statement was related in part to problems stemming from the

reconversion of defense and space research plants to other uses. We urged at

that time a striking parallel between the problems of reconversion and those

stemming from the industrial and economic changes enforced by an ever accelerating technology. Moreover, it was our argument that technology seldom proceeds

in smooth and even fashion and that shifts in the industrial mix have always

occasioned marked social strain. We sought to bring to bear on this thesis

pertinent historical as well as contemporary evidence to underscore the need for
3430 NATION'S MANPOWER REVOLUTION

foresight and preparation in dealing with the intense psychological and economic

stresses that inevitably accompany technological change.

The pace of technical development is so rapid today that its economic application is unlikely to be restrained by the social cost it engenders. Automation has

markedly increased the capacity of capital to produce, so much so that if we were

to draw a chart of that capability it would exhibit a rapidly rising curve, one

described as exponential in character. The curve of social cost would have to rise

even more rapidly before it could begin to exert any restraining influence, but by

that time the social turmoil engendered might well nigh become unbearable.

Hence, we do need to think ahead, to study possible consequences and to design

measures that would help mitigate whatever injurious effects might flow from

technological change. Consequently, the proposed legislation to establish a

Commission on Automation is a decided step in the right direction. It is an action

that all of those concerned with the problem can have no hesitation in supporting.

No institution in our society bears a greater final responsibility for developing

ameliorative measures than government. Private arrangements such as are

embodied in collective bargaining agreements have been unequal to the task.

Collective bargaining in meatpacking, printing, autos, steel, and on the docks has

not been overly successful in dealing with automation. In fact, such schemes as

profit sharing, cost savings sharing, severance pay, interplant transfers, or early

retirement are of help only to the worker who is still on the inside. They do little

for the worker who was displaced last year, or the year before or the year before

that, nor for the young worker just out of school and looking for a job.

Further, it must be recognized that government, for reasons of national security,

has been deeply involved in the development of the new technology. Our

research and development bill, for which the Federal Government paid two-thirds

of the $16 billion spent in 1962-63 and which goes mostly to aircraft, missiles,

electronics, chemicals, and machinery, reflects that involvement. This is not

unusual: it has always been expected that government would be concerned with

such matters. As far back as the recorded memory of man can go, government

has been involved in technology. One calls to mind the hydraulic societies of

Asia in which large waterworks are maintained for irrigation and communication,

the temples and pyramids of Egypt, the hanging gardens of Babylon, the bridges

and aqueducts of Rome and, in our own age, the Manhattan project of World

War II. In fact, it is in connection with matters of national security that

government has the greatest need for the technologist and the scientist. The

interrelationships of national security and technology has been emphasized by

thermonuclear weapons, the cost of which can only be borne by government

resources. And only the government can shoot satellites into the atmosphere

and pay for the exploration of space. Sonic detecting instruments, radar, antiaircraft control, proximity fuzes, and the computer itself, so central to automation, have been developed by the requirements of national security.

It is of course improbable that government can or will relax its interest in

technology since the latter is required for security. We must guard our defense

know-how much as the Byzantines held secret their mixture of sulfur, pitch, and

naptha, a concoction that helped them keep the Arabs at bay for 400 years.

Interchangeable parts, a basic principle of the present day assembly line was

devised by the Frenchman LaBlanc in 1785 and the American Whitney in 1800

primarily for weaponery. Advances in navigation during the 17th century were

fostered by governments to help navies in their tasks of defense, and the long

search for an accurate method of measuring longitude at sea, to which men like

Newton and Halley, lent their prodigious talents, represented an important

service to government.

Nowhere is the relationship of the scientist to the needs of governments so

clear as in the case of the computer. The idea for an automatic calculating machine goes back to the early 19th century when Charles Babbage, an English

mathematician, proposed a device that would solve certain mathematical equations and print out the solutions. With the help of the British Government he

began to build his machine in 1822 and by 1833 some £17,000 had been spent

even though only a small model of the machine was ready. Several present-day

ideas were anticipated by Babbage: automatic functioning, control units, and the

selection of alternative collections of data. Unfortunately, the device was never

completed, despite 40 years of work. Ironically, this early computer failed to

influence future work, for the modern electronic computer began to be developed

in the 1940's with no foreknowledge of what Babbage had done.

Yet government had a continuing need for just such computational devices.

In 1915 Hannibal Ford constructed an analog computer to calculate the range
NATION'S MANPOWER REVOLUTION 3431

for naval guns. It was an important instrument during World War I. Improvements in such devices continued through the years, culminating in Vannevar

Bush's mechanical differential analyzer built at MIT in 1931. Despite its cumbersome character, the Bush analyzer could solve a problem in about a half hour

for which a mathematician might require a week. The machine was particularly

useful in solving ballistic problems for the armed services. In 1942, it was replaced by an electrically driven analyzer (which was not yet electronic) and

again was used for solving certain military problems.

Today such computers are all electronic in structure, employing voltages and

circuitry instead of mechanical gadgets. About 80 percent of them are used for

space and nuclear research. The second largest application is in the petrochemical

industry where its use is widespread for controlling temperatures, pressures, and

densities. In aerospace, the analog machine establishes preliminary systems

requirements and airframe shapes. The Polaris missile has a built-in analog

device which monitors its flight.

The early digital computers, such as Mark I, built by Howard Aiken, one of

the pioneers in this field, were also used for solving problems related to the national

security. One of the culminations of these developments is SAGE, a huge network of computers, perhaps the largest in the world, designed for continental

air defense. SAGE took 7 years to build and the original programing, preparation

of instructions and their translation into machine language, required 1,800 manyears to write. There is no question but that Government has a keen interest in

the development of computers not only for purposes of defense but for data processing as well. By 1962 the Department of Defense had spent some $15 million

on computer installations. Today the Federal Government is heavily involved in

computer operations to the extent of a $23 million outlay in 1963 for data processing along. It now has over 1,200 automatic data processing systems and is

the largest customer in a $3.5 billion a year industry. The growth in the number

of computers in the Nation generally has been phenomenal; from 1 machine in

1945 to 20,000 in 1963 with another 5,000 to be added by 1965.

It seems clear then, that the Government has been deeply involved in creating

a technology the distant implications of which are just beginning to dawn upon

us. The impact makes itself felt in industry as well, where the search for laborsaving and even capital-saving techniques continues unabated. The wrench

that this can give to the social milieu seems fairly obvious and it becomes increasingly painful as more and more humans are torn from that milieu to play

out the last skeins of their lives in desperation and despair.

The way in which the new technology can affect us all may be illustrated by

its applications to some of the more significant manufacturing industries in the

country. While humans frequently exercised control and guided the machines

and tools in the factory, methods in manufacturing have become increasingly automatic throughout the course of the 20th century. Indeed, semiautomatic machine tools provided only energy, with the skilled machinist still present to

decide how deeply to cut into a metal workpiece or when to reset a tool. But

when the computer and its associated feedback controls were hooked into traditional equipment, the workman was made redundant. For with these new

devices information on performance could be fed back into the process to make

all the necessary adjustments for possible errors—precisely the task that humans

had always performed. During the decade of the 1950's the spread of computer control methods in industry began to develop in earnest. In 1951 only

7 general purpose digital machines were used in manufacturing: 10 years

later there were about 7,500 such systems in operation. Some industries were

able to move quickly into the new technology, for both the materials input and

the product exhibited continuous process characteristics easily adaptable to the.

computer—oil refining, chemicals, power generation, and even steel. In the

case of the latter, sheets must move through rollers at high rates of speed: variations of thickness must be detected quickly if the sheet is not to wrap itself

around the roller. In chemicals, even more variables must be watched: raw

materials mixtures must be carefully balanced, containers must not become

overfull, impurities have to be removed, temperature and pressures are measured

constantly, distillations drawn off.

Yet more and more the production of discrete products is being handled as a

continuous process. This was demonstrated by the Western Electric Co. in 1961

with its computerized manufacture of carbon resistors, small devices that are used

to control the passage of electric current. An air-conditioned dust-free plant

produces 1,200 resistors an hour and the product is much more reliable now since

the perspiration from human hands no longer contaminates the delicate carbon
3432 NATION'S MANPOWER REVOLUTION

covering. The resistor itself consists of a coated ceramic core with a metal cap at

each end. The work itself is done on a 120-foot-long line with eight work stations,

four inspection stations, and computer control system. Feedback mechanisms

check the performance of the line at each station. All the work is done in a

virtually continuous flow. Aside from some watching at the work stations the

only human effort expended is in removing the package at the end of the line.

The advantages of these new methods seem obvious: great capacity, higher

productivity, less time in production, increased time for machine operation, reduced inventory, reduced variability in the product, less floor space, easier maintenance, lower costs per unit of output, and in some cases even a smaller capital

outlay. These are decided material gains and no doubt they enhance the profitability of the firm. Nevertheless, there are countervailing costs which do not

enter into financial statements. And the pursuit of technological advantage tends

to brush them aside. One must think of the humans who were once involved in

industry.

Consider, for example the striking development of numerical control in the

machine tool industry. Here the computer itself guides the drill press or milling

machine and the operation is taken completely out of the hands of the human

operator. Complicated parts are carved quickly, accurately, and automatically.

Rectangular blocks of metal can be machined into a complex missile valve or pump

housing with only a punched tape as a guide. The numerically controlled machine tool operates in all three dimensions, automatically employs up to 60 separate cutting tools to do its job and replaces as many as 6 conventional machines

and their operators. The method started in the early 1950's when efforts were

made to carve helicopter blades out of a single slab of metal. By 1952 a conventional milling machine was developed to work with numerical controls supplied

by a computer. By 1955 the technique was good enough to be displayed at trade

shows. By 1957 airplane wings were being machined from single chunks of metal.

By 1960 universal numerically controlled machine tools had been developed with

five axes of motion able to perform a wide range of operations. By 1963 there

were almost 4,000 numerical control machines in use, and annual sales of these

devices had reached 25 percent of total machine tool volume, or about $200 million, six times what they had been in 1959.

With this technique the skilled craftsman is automated out of his job. But

the engineers, too, who have developed the new machines are not immune.

The more sophisticated examples of automation are turning on their masters,

as it were, and taking over traditional engineering work much as they have taken

over the grinding, milling, and boring. Computers design motors and decide

on the best shapes for drying kilns. Original design problems involving variations

of standard product lines can be solved by a computer in 30 minutes as compared

with 6 days required by a man with a slide rule. The computer is fed the logic

of a particular engineering design, so that when information from a new customer

order for equipment is inserted, it uses its stored knowledge to generate design

plans and to produce all the paperwork required to start the manufacturing process.

Automatic drafting machines draw aircraft wings and lay out circuits in electronics. The function of an engineer's brains and the work of his hands can be

given over to an electronic device.

Thus, discrete production can be converted by today's technology into a

continuous process. Where the latter is inherent in the production of goods, as

in electric power industry, there is no question but that automation is an indispensable condition. Here the computer is employed for data logging, scanning,

warning systems, and for measuring performance. Automatic data logging makes

it possible to operate the most complicated substation without anyone in attendance and with no loss of reliability or safety. It is estimated that automatic

dispatch systems control 80 percent of the electric power capacity of the country.

In cement manufacture, the computer solves raw material blending problems.

At the United States Steel Atlas Cement Division, 14 old kilns were replaced

with a single giant, 620 feet long which is fully computer controlled, the most

automated of all cement operations in the country. In the petrochemical industry

computers control cracking furnaces, blend gasolines, and do all the data logging,

that is the recording of what takes place, an essential operation in any chemical

plant.

Whatever industry one wishes to survey, it is possible to discover the beginning

of automated development. This is the situation at present in papermaking,

bakeries, steel fabrication, automobiles, shipping, railroads, and many others as

well. While it is true that these methods have enhanced the capacity to produce

and the rate of productivity there is little question but that they have had a
NATION'S MANPOWER REVOLUTION 3433

serious impact on jobs. Those who dispute this statement must quarrel with the

estimate made by the Bureau of Labor Statistics, which pointed to a loss of

1 million jobs in manufacturing industries alone between 1953 and 1959 as a

result of advancing technology, with prospects for the future looking even gloomier.

True, employment between 1957 and 1963 increased 4.3 million in the "nonfarm

sector" as indicated in the 1964 Manpower Report, but one must examine the

sources of that growth. The fact is that direct employment by Federal, State,

and local governments accounted for 46 percent of the increased jobs in those years:

Government procurement programs accounted for 19 percent; nonprofit institutions for 16 percent; part-time jobs generated by private demand for 14 percent;

and full-time jobs created by industry's own efforts for only 5 percent. Hence, it

may be fairly concluded that private industry in recent years has not successfully

met the challenge of automation, at least insofar as new jobs can be provided for

an ever-growing labor force.

There is little consolation for the factory worker in the expansion of Government employment since the likelihood is that he does not possess the necessary

transferable skills. In any event, further growth in the number of Federal jobs

appears to be a doubtful prospect. To make matters worse, employment may

drop because of technology in at least 18 major industries which have up to now

enjoyed high volume, according to a joint report of the Department of Labor and

Department of Commerce. In 14 other industries, moreover—trade, banking,

insurance, transport, electronics, and synthetics—only increased demand can,

in the opinion of the aforementioned report, overcome the effect of spreading

laborsaving devices.

It is sometimes said that precedent for Government action to meet the problems stemming from changes taking place in the economy was provided by the

Full Employment Act of 1946. But this statute fails to define what "full employment" goals ought to be in an economy undergoing constant change. The

fundamental economic relationships involved are not very complicated: as

productivity increases there must be a concomitant increase in output or jobs

are bound to disappear. Technology, in part a child of government, has stimulated productivity, but production has not been increasing fast enough to provide

all the jobs we need for an ever-growing population. From 1909 to 1947, the

average annual increase in productivity was 2 percent; from 1947 to 1960 it was

about 3 percent; and from 1960 to 1963 it rose 3.6 percent each year. With this

annual rise in productivity and with some 60 million people in the private labor

force, 2.1 million new jobs would have to be created every year just to keep

unemployment from going up—and another 1.5 million a year to take care of the

young people just coming into the work force. Now, while output has indeed

been on the increase, the pace of the increase has evidently been too sluggish to

compensate for the enhanced productivity stemming from the new technology.

It is argued by some observers that the sole solution to the problem of displacement is a higher level of aggregate demand. The recent tax cut was intended

to provide a fillip for such demand, but it remains to be seen whether a further

increase in our gross national product will do much for those whose skills have

become unnecessary and unwanted. The Council of Economic Advisers asserts

that there is a "proven capacity for a free labor market to reconcile discrepancies

between particular labor supplies and particular labor demand." To judge by

the experience of unemployed miners and redundant packinghouse workers,

such a statement appears to be more an article of faith than a scientific statement.

In recent years, the GNP has expanded as much. as 6 percent per annum in

current dollars, and not many new jobs have come into being, especially for

those who need them most—the displaced, the young, the unskilled.

It is evident that we need to know much more about automation and its effects

if we are to develop appropriate measures to deal with it. At the present time,

such information as is available is piecemeal, provided by a variety of agencies in

Government. The proposed legislation would help codify this growing body of

data, but more important would provide some guideposts for developing the necessary approaches required. We commend the framers of these bills for the

statesmanlike manner in which the scope of the proposed Commission has been

defined: we think it would be difficult to improve the statement of purposes set

forth in section 1 of each of the bills. And we commend the subcommittee for

its careful consideration of the proposal. We urge quick and immediate action:

one of the great contributions this Congress could make to a viable solution of the

complex problem of automation is the passage of the proposed legislation.
3434 NATION'S MANPOWER REVOLUTION

Mr. EDWARD D. FRIEDMAN

Counsel, Subcommittee on Employment and Manpower, Committee on Labor and

Public Welfare, U.S. Senate, Washington, D.C.

DEAR MR. FRIEDMAN: Thank you for sending me the new Senate bills for the

Presidential Commission on Automation. I am enclosing a copy of a talk which I

gave recently and copies of new publications we are distributing which I believe

are relevant to my position on this topic.

Again I would like to stress that it is my feeling that the attention of this Commission should be directed specifically at strengthening and speeding up activities

in the social sciences in order for them to catch up with the physical sciences.

I would suggest that one of the areas for which funds should be made specifically

available is studies and experiments in the application of cybernetic principles of

organization to the social and economic structure of the business enterprise. I

believe this is where the solution to the problems posed by automation are likely

to be found.

Under separate cover I am sending you five copies of our recent publications

for distribution to the committee. Thank you for notifying me and allowing me

to present my views.

Very truly yours,

THE UNIVERSITY OF WISCONSIN

SCHOOL OF COMMERCE,

Madison, June 5, 1964.

J. J. JEHRING, Codirector.

NEW TRENDS IN PRODUCTIVITY MOTIVATION

(By J. J. Jehring, codirector, Center for Productivity Motivation, School of

Commerce, University of Wisconsin, Madison, Wis.)

In the coming decades the social sciences, in my estimation, will play the most

important role in developing increased productivity in our society. In the past,

the scientist, the engineer, and the technician were considered to have shouldered

the primary responsibility for the great growth of production and productivity

we have experienced. However, this is about to change.

Toward the end of his career, someone once asked Thomas Edison what he

thought would be the greatest invention of the future. Mr. Edison replied that

he believed it would be the formulation of a social system which would enable

mankind to fully benefit from the new discoveries in science and technology.

Currently, there are a number of interesting experiments with social systems

taking place which have as their purpose the development of new forms of socioeconomic organizations which can lead to increased productivity. Even though,

upon analysis, it would seem that these new approaches hold a tremendous potential for helping man to better utilize his expanding technological know-how and

increase the productivity of society, these new ideas do not now appear in the

social science textbooks, because they have been as yet largely undiscovered by

the social science researchers.

What is productivity? There are many definitions. Some are quite involved

and technical, but in its simplest form, it is a measurement of the input-output

relationships in any productive process. Inputs are those components that are

needed to produce goods or services; outputs are results achieved in terms of

services or goods produced. In its primary sense productivity can be equated

with efficiency. When we say our productivity is rising we mean our society is

becoming more efficient. It is •using a lesser input to achieve a greater output.

These questions may be raised: Why do we have to be so concerned about

efficiency? Aren't we efficient enough? Don't we have an affluent society?

Unfortunately, no society can progress successfully and ignore efficiency. It is

an absolutely necessary component for man's freedom. Efficiency is a relentless

drive not only because of the ever expanding wants of individual men but also

because the world is faced with a population explosion. A constant increase in

efficiency is imperative also because of the necessity to free an increasing number

of people to engage in those jobs which are of growing importance in our more

complex society. Educators especially fall into this group. The pyramiding

number of new jobs in this area must be supported by the increased productivity

or efficiency which has taken place in the so-called productive sector of our

economy.

If one were to consider the small number of schools and teachers our country

could afford to support in the 1860's and compare it with the larger number in
NATION'S MANPOWER REVOLUTION 3435

1900, and the still larger number we are able to support today, some indication

of the results of increased productivity on education becomes apparent.

It was impossible to have a high ratio of schools and teachers to total population

in the 1860's because too many people were needed to raise the farm products,

build the cities and the factories, and in general expand the frontiers. Today

the situation is completely different. Science and technology invented and perfected the machines which permitted the substitution of mechanical power for

human power and animal power. The inventions of the late 19th and early 20th

centuries released millions of men. Due to the increased productivity resulting

from new technologies, fewer individuals in business were able to do the work of

many thousands who were then free to accept other positions. This shift to other

jobs of a large segment of the population was accomplished only through making

many significant changes in our socioeconomic institutions in order that the benefits of the tremendous power increase could be put to a social use.

Changes which were introduced, in order that the benefits resulting from released productive time could be spread to the advantage of more and more people,

were many and varied. For example, revisions were made in methods of taxation.

New taxes and forms of taxation were added to the original property taxes. The

income tax and the inheritance tax were followed by the social security tax and

the sales tax.

Educational institutions also went through many changes. Compulsory

education at the primary and the secondary levels was introduced. Consolidation of small schools and school transportation was added. There was a rapid

growth in adult- education, the public colleges and the State universities. Many

more teachers and administrators were trained and employed and students were

kept in school for a much longer time.

Governmental institutions were also changed. We enlarged the Government

at all levels. New regulatory bodies were established and various security departments were established. Service facilities such as hospitals were rapidly expanded.

Large corporations were started. Monetary institutions of all kinds were formed

and consumer credit grew rapidly.

It is evident, therefore, that there has been a continuous and tremendous growth

and change in our socioeconomic institutions during the past 50 years, made

possible only through the extraordinary increases in productivity which we have

been able to achieve during this period. Much of this has escaped the notice of

the average individual, perhaps because it has been so gradual that it has appeared

to be evolutionary rather than revolutionary.

Most of this increased productivity has taken place because of the more efficient

application of power to the production process. Now, however, in the decades

ahead we are faced with the possibility of and the need for an even greater change

in our social institutions. The reason is that we have a new and even more farreaching development as far as a potential productivity increase is concerned

appearing on the scene in the guise of the mechanical application of mental

processes to the production of goods and services. This is being referred to as the

cybernetic 

revolution, 

and in actual practice takes the form of utilizing the

computer and automated machinery.

With automation, again we are faced with the need for a major overhaul of our

socioeconomic institutions. However

'

this time the changes are likely to be much

more radical than those that resulted from the application of power to the production process.

What are some of the changes that are likely to occur as a result of this new

development? This is the question the social studies teachers should be asking.

If you are seeking answers, it is quite certain they are not likely to be found in

the social science literature today any more than descriptions of our current

educational or economic practices could have been found in the literature of 1900.

Perhaps occasionally one might find a brief mention of some new approach but

the systems of the future are not likely to be in the mainstream of the literature.

However, it is possible to obtain insights from another source as to the possible

directions future changes might take. The place to seek them is in a study of

some of the developments which are beginning to be utilized in certain areas of

the business community.

In the private sector of our economy some executives are now experimenting

with certain solutions which seem to hold considerable merit in terms of solving

some of the problems posed by the cybernetic revolution. A study of these might

offer some indication as to the direction our social institutions are likely to take

in the future. For example, there has been a growing use of systems of incentives

in our business sector in the guise of profit-sharing and production-sharing and

employee ownership programs. Attempts are being made in some quarters to
3436 NATION'S MANPOWER REVOLUTION

increase productivity by substituting systems of labor-management cooperation

for conflict. At the same time, there has been a rapid development of the idea

of the saved wage in the form of various kinds of so-called fringe benefits.

These developments of sharing, cooperation, and the saved wage can be crucial

for out State of Wisconsin in terms of productivity motivation. We are in a

competitive market where added efficiency pays off for the society that can obtain

the advantage of increased methods of efficiency.

It is important to note that motivation is one of the most significant factors in

the history of man. Any human system, to progress, must have incentive. As

Mr. J. W. Gardner, of the Carnegie Foundation, has pointed out in his recent

book, "Excellence":

"Whatever the reasons for lack of motivation, the consequences are apt to be

devastating. Nothing—neither wealth nor technology, neither talent nor

wisdom—will save a society in which motivation continues to deteriorate."

These systems of sharing, cooperation, and the saved wage combine the best

current knowledge in the social sciences in regard to organizational efficiency.

If properly applied, they can result in creating organizations that maximize all

the factors of production. Such systems can be called multimotivational, for

they are the ones under which all the factors of production can be motivated at

the same time. Workers and managers both share in the results which they

achieve through entering into a previous agreement as to how the share is to be

divided. In addition, stockholders benefit through increased dividends due to

savings and growth in the value of their investments in a successful enterprise.

In a competitive market consumers also benefit through the possibilities of

reduced prices, increased quality, or better service. Recently, not only management but labor also has been advocating the use of such systems. Walter Reuther

made the following statements:

"Why couldn't there be a basic wage—a fixed cost just as tax is a fixed cost or

as the price of a ton of steel is a fixed cost, with its price having nothing to do

with whether General Motors needs a lot of steel or a little steel? And at the

end of the year, the worker having received his basic wage, then gets his share of

the profits just like the president. , General Motors will probably show close to

$3.5 billion in profits for 1963. Is the equity that a GM worker has in that

amount of profit different from when GM made only $1 billion? The answer is,

obviously, 'Yes.' I am not wedded to the idea of profit sharing or progress

sharing. I only say that if the competing equities have to be determined in

advance of the facts we are only guessing and there ought to be a more rational

way of operating" (Walter Reuther in a speech titled "First Things First" given

at the Fund for the Republic).

As you can well imagine, under a sharing system each is going to try to do his

best in order to reap the greatest benefits. This holds true not only for the

employees, but also the managers and even the stockholders. In the literature

there are some amazing results that have been achieved through the effective use

of the systems described above.

For instance, a small gray iron foundry in Ohio, recognized by the people in the

trade as an extremely efficient producer, made impressive gains after installation

of one of these sharing programs. While many gray iron foundries were going out

of business, this company increased its sales from $407,094 in 1945 (the last year

before the sharing plan) to $2,156,124 in 1955. The foundry was selling profitably

at a price 40 percent below the average market price for gray iron castings in 1945,

and through economies effected under sharing was able to sell profitably at 48

percent below the market average by 1955. These economies and increased

sales boosted net profits before taxes from an index of 100 in 1946 to 423.9 in 1955,

and permitted the employees to share $1,757,204 during this period, over and

above their regular wages which were comparable to community and industry

levels during this time.

This unusual achievement which benefited the customers, the stockholders

and the employees was an outgrowth, largely, of the increased incentive achieved

in the gray iron foundry through the successful operation of a sharing program

which resulted in a 101.5-percent increase in good castings produced," a 245.5-

percent increase in the value of such castings with only a 72.6-percent increase

in the man-hours used. Absenteeism and tardiness significantly decreased,

while at the same time the overhead costs per unit were lowered. Scrap was

reduced 18.1 percent compared to the presharing period, 1938-41, while bonus

months for scrap reduction increased 120.3 percent.

This demonstrated how one company, through the use of various management

techniques, was able to achieve superior results. It also shows how sharing
NATION'S MANPOWER REVOLUTION 3437

enabled the management to apply certain new principles of organization to

further increase the labor productivity of an already efficient operation.

In some of these systems another important item is added; namely, "the

saved wage." This is, indeed, an important development which could have farreaching effects on our future society. This saved wage in a sharing system is

usually built up out of profits and as such does not add to cost and is not inflationary. It is invested in the name of the worker in stocks and bonds and earns

interest for him. In many businesses this grows up into a very sizable fund.

The annual income from these funds for the worker in some cases is larger than his

annual wage. People who have such funds could afford to abandon their production jobs at an early age and assume other jobs in society of a nonproductive

nature at a lower income rate without sacrificing a high standard of living.

John Gardner writes: "Organizations need not be designed in such a way that

they destroy human initiative. They are designed that way because we have

not been willing to be as inventive about organizational matters as we have been

about hardware" (John W. Gardner, "Self Renewal," p. 63).

In a sense teachers in Wisconsin are able to share in this saved wage approach

through our retirement system, especially with its variable annuity provision.

This ties each teacher directly into the benefits which result from our work in

teaching those who will eventually be the architects of our future productive

society. However, achieving the increased productivity is only half of the problem—the other half has to do with creating the social institutions necessary to

spread the benefits of this increased productivity throughout society. In this

regard Mr. Gardner says:

"We must discover how to design organizations and technological systems in

such a way that individual talents are used to the maximum and human satisfaction and dignity preserved. We must learn to make technology serve man not

only in the end product but in the doing" (John W. Gardner, "Self-Renewal" p. 64).

It will be in the problem areas such as the senior citizens, medical care, juvenile

delinquency, urban renewal, and expanded education where the new jobs of the

future will be developing. Society will have as its prime task seeking out new

forms of socioeconomic institutions capable of channeling the benefits of increased

productivity so that they can be bi ought to bear upon these problems.

There are two important tasks before those of us who are concerned with the

social sciences. First, it is our responsibility to educate the citizens of the future

in such a fashion that they will fully understand the nature of the problems they

face, and secondly, we must enable them to construct the proper kinds of social

organizations that will enable man to take advantage of the new revolutions which

are underway and at the same time protect his freedom while the physical wants of

larger and larger numbers are being taken care of.

Much study remains to be done in the social sciences. We are just beginning to

experiment with the newer forms of social organizations. We haven't yet fully

invented the kind of institutions that will be required to fill the needs of tomorrow's

society. Some business leaders are experimenting with ideas that could eventually

comprise at least in part some of these newer systems. Such concepts as sharing,

cooperation and the saved wage, and multiple management are likely to be important component parts.

"The most hopeful thing today is that on some fronts we seem to be achieving

patterns of organization that avoid the stultification, rigidity, and threats to freedom inherent in monolithic interpretations. If this is true, it may be the most

important single factor in our future" (John W. Gardner, "Self Renewal" p. 63).

The social studies teachers have a key role to play, for they can educate the

students to an awareness of these newer developments. To accomplish this,

teaching should be done not only from the standard texts which have been focused

largely on the past, but it is necessary to seek out new materials that focus on the

future as well.

We at the Center for the Study of Productivity Motivation are developing this

type of teaching material which is focused on the future, and we plan to make it

available as soon as possible to the teachers in the state of Wisconsin to help their

students invent the new socioeconomic organizations.

Men vs. Machines:

AUTOMATION IN A

WISCONSIN COMMUNITY

by John Newhouse

Mr. Newhouse is a staff writer for the Wisconsin State Journal,

Madison, Wisconsin, and is a member of its editorial board.

3439
3440 NATION'S MANPOWER REVOLUTION

Automation's Blessings Are Mixed

(Sunday, November 17, 1963)

For better or worse, automation has come to Madison.

It's to be found in industrial plants, banks, insurance companies, the

telephone company, and the plant in which our newspaper is printed.

All over town, people are learning to cope with the changes the more

sophisticated machines bring with them, as they do more of the jobs people once did with muscle and mind.

Automation isn't hitting Madison with the impact it may have in a far

more industrialized city, where hundreds or thousands of bewildered men

and women may find themselves out of jobs and seemingly with no place

to turn.

But management in many a Madison business is worrying about how

far to go on automation, and what its effects will be. And many a worker

is eyeing his job in terms of the machine that one day may take his place.

Take the Gisholt Machine Co., for instance.

A pair of big machines stand on the production floor. They are called

Milwaukee-matics. They cost a quarter of a million dollars each. They run

24 hours a day. At that price, they have to.

On the side of each machine is a drum. It holds 30 machine tools.

Beside the machine is a cabinet with hundreds of transistors, miles of

wires, and a tape that tells the machine what to do next.

The tape gives the orders. The drum rotates, to bring the next tool

needed to the fore. An arm plucks the just used tool from the chuck of the

machine and carries it back to the drum. At the same time, the new tool

is carried to the chuck and readied for work.

As this is going on, a metal casting on a circular table called a palette

turns to a commanded point and stops. The body of the machine slides

horizontally to one side—just enough. It rises—just enough. The new

tool advances and drills a hole—in just the right place and just deep

enough to satisfy the tape.

And this goes on, operation after operation.

At the side of the machine sits a man who used to do many of these

jobs on less sophisticated machines. Now his work is reduced to fastening
NATION' S MANPOWER REVOLUTION 3441

the casting on the palette, making sure the machine performs perfectly,

and removing the casting when the work is done.

What does he think of automation?

"It's here," he says. "You can't stop it."

He works the same number of hours as he did on his former job. The

rate of pay is the same. But he isn't using the skills that he once used.

The Gisholt company has no alternative but to go to the machines, they

contend at Gisholt. The competition is becoming automated. The machines

don't get tired. They don't make errors. They don't get in squabbles with

their in-laws, and mope. They don't take coffee breaks. They work 24

hours a day.

And this can be reflected in lower costs which mean greater sales and

protection of jobs.

"The machine tool company which will survive will be the company

which makes the most intelligent use of automation," predicts Rodney

Stebbins, assistant sales manager.

And this brings up the question as to just what is automation.

"Automation is a continuation of the industrial revolution, but with

feedback," says John Wrage, public relations director for Gisholt.

Some define mechanization as the process by which a machine puts peas

in a can, while automation is the process of putting the peas in the can

AND making a decision as to which peas shouldn't go in the can and discarding them.

Others say that automation occurs when one machine does a job virtually by itself, and then hands it on to the next machine to do still more

work by itself.

On the national level, there are several schools of thought. One holds

that end result of automation will be a shift of people in jobs, the creation

of many more jobs, and a better way of life.

The opposing school of thought holds that this is the industrial revolution, all right, but it's gettting out of control. It's erasing jobs much more

rapidly than they can be, or will be, created. Unless the benefits are spread

much more widely, through shorter work hours or some equivalent, humanity is in for tough sledding.

At Gisholt, no one s predicting just where it all will end.

Its Own Role

Ironically enough, the Gisholt firm owes a good part of its present

pre-eminence in the machine tool world to automation, introduced long

before the word was coined.

Back in the 1940s, Werner Senger, now a vice-president, came up with

35-388 0-64-pt. 10 7
3442 NATION' S MANPOWER REVOLUTION

a balancing machine. It evolved into a tool which would balance an entire

engine, finding the amount of imbalance and its location, and then adding

a bit of welded metal or removing a bit of metal through boring to put

the engine in balance.

It was automation at its finest. It has helped the Gisholt company to

grow here and give jobs to Madison people.

Widespread Effects

Its effects in the American economy have been widespread, and also

impossible to measure. Turbines spin at faster speeds. Electric motors are

smoother. Cars go faster. And all of this has undoubtedly created jobs elsewhere by balancing machines which humans, without the Gisholt balancers, couldn't balance.

Today, the Gisholt company is automating its newest lathes, in the

never-ending battle of industry to put out the best product and make the

most sales which, in turn, will protect the jobs of workers.

There are some men, such as those on the Milwaukee-matics, whose jobs

have changed.

And there are new jobs.

Somebody has to punch the tape that tells the machines what to do.

This is a new, skilled job.

Another new job is that of programming. Computers can produce all

sorts of information a modern company needs, but somebody has to be

smarter than the machines to tell them what to do.

If a client calls Stebbins to ask when he can expect delivery of a new

$200,000 machine, Stebbins can call product control. Cards zip through

a sorter. A computer analyzes them; and in minutes, he has a progress report on the machine.

Then, he can advise the client, who can fit a realistic delivery date into

his calculations.

'New' Service Man

Another "new" job is that of the service man. No longer is he a man

with dirty hands and a monkey wrench. He wears a business suit. He flies

by jet, for his time is important. He gets a good income, based on his

knowledge of electronics.

He looks over the plants where he services machines for places where

other machines of his company will fit in. Salesmen follow up his tips.

Executives worry about how to buy the machines, how much money they

will make them, or what they will do to the relations between a plant and -

its people.

The worry over people is a considerable problem at Gisholt.
NATION'S MANPOWER REVOLUTION 3443

Shift in Jobs

"Ideally, automation should not result in unemployment," says Wrage.

"If anything, it ought to increase employment. But this can be accomplished only at the cost of shifting people from one job to another. And

the best shift, of course, is to a higher and a better job."

This means, he says, that some people should be training for the better

job, to be ready for the shift when it comes.

And the problems will be with the person unwilling or unable to learn

that new job.

Furthermore, he says, automation is changing hiring patterns. At one

time, he said, the man sought was the man with the weak mind and

strong back.

Different Pattern

But a different pattern looms today. The accent is on the man who can

advance to the better job, if the machines demand that advance—not the

man who won't or can't change..

"And the problem of the future may well be this army of unemployables which include the most tragic of all, the persons with good capabilities who drop out of school and find themselves with no place to go,"

Wrage says.

Over in one end of the production floor of the Gisholt plant, there are

three lathes. One of them has a human operator, making the changes as

they are needed, watching the work, intent on his job.

End Unknown

Two of the lathes are doing the same work, at the command of little

black boxes mounted atop the machines. Their operator sits some 50 feet

away.

No one knows exactly where it all will wind up.

But there is a lot of concern, both on the part of the worker and of the

plant management.
3444 NATION'S MANPOWER REVOLUTION

II

Automation Can Develop Jobs, Too

(Tuesday, November 19, 1963)

VERONA—The Carnes Corp., in Verona, is growing like all get out.

Since 1957, when a new management took over, the number of square

feet of manufacturing space has more than doubled.

The number of people on the pay roll has increased from 150 employed here in Verona to more than 500, with another 50 employed in a

new plant in Canada.

And gross sales have increased from $1.8 million to $8.9 million.

There are any number of factors concerned in the rapid growth, ranging from good management and heads-up engineering to the luck of having a product in demand at just the right time.

But high among the factors is automation.

The Carnes Corp. is an instance of a corporation that had to go to automation and where, for a time, automation put people out of work. But,

in less than three years, the automated machines created a climate where

more and more men and women were able to find jobs at Carnes.

And now the number of jobs has more than trebled.

The Carnes Corp. has had an interesting history. It began in a garage

out on Helena St., in Madison, back in 1943. It was started by Wilbur

Carnes, now Madison's 16th ward alderman. He was a good engineer, an

ingenious operator, and he knew a good thing when he had it.

The "good thing" was a line of air distribution equipment—diffusers,

grills, and registers which distributed air from central heating or air conditioning units evenly into rooms, plus a line of power ventilator equipment for exhausting air from buildings.

In Market at Good Time

He came on the market at a particularly good time. There was a vacuum

in such equipment, and he was able to use the national distribution system

of the air conditioner people for rapid growth all over the country.

The garage grew too small. Additions were made. In 1950, the plant
NATION'S MANPOWER REVOLUTION 3445

moved to Verona. The original small buildings were added to, time after

time.

Then the inevitable happened.

Other firms noted what Carnes was doing. They entered into competition. As the competition strengthened, more and more attention had to

be paid to cost in the now more competitive market.

In 1950 there were only five manufacturers in the country, a figure

which was to grow to more than 50 today, with Carnes and two others in

a tight tie for second place in the field.

Big Loss Factor

In 1957, Carnes sold out his interest in the company for more than $1

million, to the Dings Magnetic Separator Co. of Milwaukee. And, in

view of the new highly competitive situation, the new management started

some intensive cost accounting to find the weak and strong areas.

They found them in a hurry.

"We found that one of our main lines was operating at a 15 per

cent loss," R. W. Krogstad, general manager, said.

There was some real soul searching in the next meeting of the board

of directors. The loss couldn't be allowed to continue, for the line was a

major part of the plant's output.

Nor could the line be dropped, for the same reason.

"We decided that the only answer lay in automation," Krogstad said.

Machine Pays for Itself

So the firm put in a conveyor system, costing $10,000. It paid for itself

in three months. The management looked around for automated machines

which could be bought and which would fit their operation.

And, when they couldn't find a machine, they designed one and had

it made.

The new machines began to put people out of work. For two and a

half years, employment was lower than when the Milwaukee group took

over. But then, as the groundwork laid in those years began to take effect,

it began to rise dramatically.

Automation was a part of the answer. Another big part was the realization of the management that it had to put out not only a product that

would compete price-wise with their competitors, but also a better

product.

More Engineers Hired

As a result, the engineering department was beefed up. From three

engineers in 1957, the number has risen to 28. They work on such things

(
3446 NATION'S MANPOWER RE VOLUTION

as simplifying the design of their product so that it can be automated

more, and produced at a lower price.

They work on new machines which will increase automation.

And they work on a product which will work better and look better.

As an example, the firm has put a considerable amount of money into

one of the quiestest test rooms to be found in any manufacturing plant.

Walk through the big door of a test room bigger than a haymow in the

middle of the throbbing plant, pulsating with all of the noises of production, and you can all but hear your heartbeat.

When tests are being run, a register or grill will be fitted into one wall

of the room, and air brought into the room through it. Then sensitive

instruments determine how much noise is caused by this particular design

as compared with another.

And the tests are done under formulae devised at Carnes which are

rapidly being accepted as standards for the industry.

Some Jobs Can't Be Automated

In other rooms, grills and registers are testing to make sure that they

give the best distribution of air to all parts of a room.

In the plant, there are some jobs that cannot be automated. Big discs

of aluminum for diffusers or ventilators are still spun into forms where

the desired designs are so varied or used so infrequently that to automate

their manufacture would not be feasible.

As the flat discs spin on a shaft, skilled men with dual levers force the

aluminum or steel over chucks to form the part into grills and registers in

an old German process.

For centuries, spinning has been the best way to do this work, and the

high degree of skill required cannot be automated.

But, in other parts of the plant, machines take seconds or minutes in

doing jobs that would take human operators far more time.

"We're going in more for engineers than bolt twisters," Krogstad said.

"Many of the tasks which we have eliminated for people are the more

tiresome jobs."

The Final Score

But this final score remains:

The Carnes Corp. has used automation to create more jobs, and better

jobs, in an industry which nationwide is creating still more jobs because

of automation.

Another 400 more people are working at the Carnes Corp., due to

automation.
NATION'S MANPOWER REVOLUTION 3447

And what would have happened if the firm had not gone to

automation?

Krogstad shrugs his shoulders. It's anyone's guess.

But there is the possibility that the 150 jobs existing at that time would

have gone down the drain of a failing firm, and that 550 people would

be in other jobs, or looking for other jobs.
3448 NATION'S MANPOWER REVOLUTION

III

Automation in Bank Costs No Jobs

(Thursday, November 21, 1963)

When the Bank of Madison decided to go to automation, first in check

sorting, they put the big new sorter in the lobby of the bank.

A comment that was made, from time to time, was:

"Huh, I suppose you're just trying to put people out of jobs!"

At the bank, they early learned to counter with:

"How'd you like to stand at a rack all day long, sorting checks into

little boxes?"

And it was this reluctance of people to do this work which was a considerable reason for the bank to go to automation.

Can't Find People

"You just can't find competent people to do this work any more,"

Frank Saeman, controller of the data processing department, says.

"Eighty-five per cent of the girls go on to college, perhaps. They won't

take such a job. The remaining 15 per cent go into various service jobs

and, frankly, it's difficult to find the necessary abilities within this group."

The decision was based on more than the difficulty of finding people

to do tedious work. The bank set up a four-point criteria, based on its

effect on the customer, the community, the employe, and the stockholder,

according to Paul Schroeder, president of the bank.

And, having determined that the change would be beneficial, the bank

decided to spread the change over five years, to cushion its impact.

No Jobs Lost

So far, Schroeder said, no one has lost a job at the bank because of

automation. And he doesn't feel anyone ever will.

You don't save any money in a bank through automation, Saeman says,

but you do get the job done. And it's a job that is growing bigger everyyear.

Since the check sorter has gone in, the bank has also automated the

bookkeeping department.
NATION'S MANPOWER REVOLUTION 3449

"We had four sorters and five bookkeepers," Saeman says, "Now we

have six persons, plus the machines, doing the same work within this

department."

But no persons have been let go because of the elimination of the three

jobs. The three have been absorbed in less tedious or better paying jobs,

for the growth of the bank has been considerable in recent years.

Deposit Growth Cited

Since the bank merged with the Union Trust Co. in 1956, the deposits

have grown from some $16 million to between $36 and $40 million.

"And Madison is one of the check-writingest cities in the nation," Saeman noted. "We average about 14 checks per account per month, as

against a national average of six to eight."

The automated check sorting and bookkeeping departments, now

known as data processing, are on the third floor of the bank.

And it's a decided departure from the way things used to be.

At one time, workers on adding machines "proved" big batches of

checks on adding machines, to check the totals; others sorted the checks

and put them in alphabetical order, and bookkeepers flipped their ledger

sheets into machines all day long, and made the proper entries.

'Iron Idiots'

Today, the incoming checks go to one of two women who "prove"

the batches of checks by entering them in a new machine which not only

adds up the totals but puts the account of the check down at the bottom

in symbols which the sorter can read.

"The Iron Idiots,' says Saeman of the sorters, "can not read your

handwriting.

"That's why we have to use a special magnetic ink which prints the

amount on the check, in the same manner that the account number and

the bank number is already printed on your personal checks."

Next step is the sorter. Checks go through this machine at the rate of

750 a minute, traveling so fast to various compartments that they're just

a blur.

There are nine compartments. Three are for the banks personal checks

and three for the bank's business checks, in three alphabetical groupings.

Another is for the Monona Grove State bank and another for the Hilldale State bahk, whose sorting and bookkeeping is done here.

(The Bank of Madison was the first in Wisconsin, outside of Milwaukee, to automate check sorting. Other Madison banks are preparing checks
3450 NATION' S MANPOWER REVOLUTION

for automation, and generally will send them to Milwaukee each night

for processing and return to Madison the next day.)

A final pocket is for rejects—the check that was badly printed, the

check that went through folded and hence unreadable, and the like. These

are checked by a human operator, and their numbers are small.

As the checks whir through, the sorter does a fantastically rapid job

of checking each account number, to make sure that it's a valid number.

Occasionally, the printer of the check makes a mistake. Or, if the account

number is not on the check, it may have been put on by a special machine

and the operater has made a mistake. You can check the number on your

own check by multiplying the first numeral by eight, the second by seven,

the third by six, and so forth, then adding the totals all together and

dividing by 11.

If the number is valid, there will be no remainder, for 11 will go into

the total an even number of times. If it won't, the number is not valid.

And the sorter does this with checks flitting past at the rate of 12/1 2

per second, and does it in the 12 inches or so of travel between the reading head and the reject compartment!

Puts Them in Order

While the sorter is checking the account numbers and putting the

checks in the proper compartments, it is also sending a continuous stream

of information to the computer. It tells the computer, among other things,

the amount of money to be withdrawn from each account number.

The checks, mind you, are not in alphabetical order. So the computer

performs its feats of electronic legerdemain, and spews forth a tape on a

high speed printer—so high speed that it prints 160 digits a second.

And now they come out in alphabetical order!

The tape then goes to one of three automatic bookkeeping machines.

The ledger sheets, also in alphabetical order, are pushed up to the

machines. The machine pulls a ledger sheet within it. If the tape finds it

has a deposit to make, or a check to subtract, the machine gets the order,

and the entry is made.

And the operator sits and watches, in contrast to the day when the

bookkeepers bent over their jobs the day long as their fingers flew up and

down the keys and their hands banged the total bars.

The customer has an interest in what's going on in this room, and it

can be expressed in service charges.

"Our service charge is 10 cents a check," Saeman says. "The actual cost

of handling a check, before automation, in the nation was 12 cents. We're

able to continue the 10-cent charge, now that we're automated.
NATION'S MANPOWER REVOLUTION 3451

"But there are non-automated banks, particularly on the East coast,

where they're charging 15 and 20 cents a check. And, without automation in this bank, it seems certain that we'd have to increase the service

charge."

Can Do Other Things

The machines do other things. They can be made to tell the operators,

via numbers on tapes, which account numbers have the last three digits

alike, or within 30 of being alike. They can be told to disregard the fact

that there is no bank number on a check, that it is vouched for by the

human operator.

But telling the machine is a complicated operation. The directions may

run into a formula expressed on a piece of tape several feet long, four

inches wide, and completely filled with numbers—all of which have to be

right.

"They're really stupid monsters," Saeman says, "but they'll do what

you tell them to do. For instance, one bank got a little tired of reading a

numeral '4' to indicate someone had transposed a figure, such as writing

23 for 32.

"So they commanded the machine to give them a written message

instead, and told it what to say.

"And now the machine writes, 'Better luck next time, stupid !' "
3452 NATION'S MANPOWER REVOLUTION

IV

Machines Replace, Improve 'Hello Girls'

(Sunday, November 24, 1963)

On Oct. 1, 1949, the last of the "hello girls" to handle local calls

trooped out of the Madison office of the Wisconsin Telephone Co.

Behind them they left silent switchboards. No buzzing signals. No

flashing lights. No people in the operators chairs where people had sat

since 1884 when the telephone had come to Madison.

End of Era

It was the end of an era. The machines had won. Dials had beaten the

"hello girls."

"You got a funny feeling," says Marion Batty, who was there. "That

empty room. The quiet. The feeling that a machine could do your work.

That you didn't count for much. It was a little scary."

How does she feel about it today, 14 years later?

"Oh, it's far better today," Miss Batty, now a chief operator, says

primly.

"I wouldn't dream of going back. We're doing a better job. It's more

interesting. There are more people . .

Huh? More people?

Sure, says Jack Mayer, Madison manager. The company is employing

24 per cent more people.

And that's the telephone company. It's a place of rapid change. There

are lost jobs in one place. But new jobs have popped up in another.

Machines have taken jobs here, and machines have created jobs there.

Here's a job that brought in somebody from another community, and

there's a job that was created in another community to be considered in

the bewildering picture of what—job-wise—has been happening. _

Devices Clicking

And you wind up with the feeling that the biggest computer couldn'ttrace all of the ramifications and significance of what's been happening in

the telephone system.
NATION'S MANPOWER REVOLUTION 3453

But come along and try, anyway.

Mayer stops at a door, and unlocks it. Inside, in the gloom, is a room

filled with electronic devices on racks, clicking away like an army of

robots, following the directions of dialing fingers all over Madison.

The little electronic gadgets, clicking their lives away and oblivious of

watching humans, are making the local calls the "hello girls" used to

make.

'Lucky They Are'

"They make 400,000 calls a day," says Mayer. "In the 'good old days,'

it took a good operator to make 1,000 calls a day. These gadgets are

doing the work of 400 good operators."

And it's lucky they are, says Mayer.

"It would be impossible to find 400 good operators to do this job,"

says Mayer. "We'd have to take just about every girl who graduates from

high school and does not go on to college.

And frankly, not every one would meet our standards. They are getting higher each year, to meet the quality of service the public expects."

More than that, the increased volume of business is dependent upon

automation, and automation in turn is making the job bigger each day.

101,904 Phones

Back in 1945, Madison had 34,490 telephones. Today the number has

risen to 101,904, three times as many.

Back in 1945, there were 176,000 calls handled per day by the human

operators. Today it's 413,000, a 134 per cent increase.

And, during that time the city has grown 55 per cent, so that the

increase in number of phones and calls is more rapid than that of

population.

But the employment growth of the company, though substantial, is not

as rapid as that of the population growth of the city.

And this is where the machines make the difference.

•

1963 OPERATOR—This is the 1963 counterpart of yesterday's

"hello girl" which handles your Madison telephone calls, as seen in

the telephone company offices.

The device on the table is one of hundreds of such devices, on racks

going from floor to ceiling, which takes care of some 400,000 such

calls each day.
3454 NATION'S MANPOWER REVOLUTION

Scores of Women

But where are these added people?

Mayer leads the way to one of two long distance rooms, where Miss

Batty supervises scores of women in a room just like that of the "hello

girls" of yesteryear.

The electronic gadgets sort of outsmarted themselves here, he says.

"We've been able to give the public better service, through automating

the local calls and a good many of the long distance calls as well, through

direct distance dialing," says Mayer.

"The result has been that the number of long distance calls has increased more than 400 per cent in the last 15 years or so. Not all of them

can be handled by automation, such as person-to-person calls, where the

operator has to make identification; calls to be charged to a third number;

credit card calling, and others.

Operators Increase

And the number of operators on long distance has risen within the

last five years by 25 per cent, from 250 to 311.

Don Brady, division operations manager, is proud of the cost to the

patron.

"National surveys show that telephone service has risen less than half

as much as other prices since 1939," he says. "Today it takes a wage

earner only half as much time to earn enough for a phone in his home as

it did in the early 1940s."

And that pattern, he is sure, is repeated in Madison.

100,000 Calls Daily

So how about the direct distance dialing equipment that's bringing the

increase in human long distance operators?

It's in two of the top three floors added last year and this to the Fairchild St. building, where Nick Guerten is in charge of operations.

"We handle about 100,000 calls per day for an area that produces about

half the calls of the state," says Guerten. "How many people do we have?

Nine."

That doesn't seem like many, particularly since Miss Batty has said that

a long distance operator can handle only about 125 calls per day, since"

they're more complicated than local calls.

On that basis, there ought to be 800 people up here.

"In the first place," says Brady, "where'd we get 800 people? In the

second place, the big increases we've had here are dependent upon auto-
NATION'S MANPOWER REVOLUTION 3455

mation. Take it away, increase our charges to the customers, and we'd

lose business."

The way long distance is being accepted, says Guerten, they're going

to have to double the capacity of his direct distance dialing department

next year, anyway.

Better Jobs

And almost certainly Miss Batty'll get more human workers in the

jobs that the electronic devices can't do.

The nine people up here are doing jobs that never existed before, says

Guerten, and they're among the better jobs and the better paid in the

office here.

And Brady adds:

"One of the things you don't see, on the surface, is that we're moving

to better jobs, that take more training and pay more money. More men

are getting jobs here than ever before.

"When we went to dial, for instance, there were four salesmen on the

road. Today, there are 45 going into businessmen's offices and showing

them how our service can save them time and money.

Computers Talk

"A dentist's assistant, for instance, can put cards in a phone to ring

the numbers of people whose appointments are coming up. A businessman can turn a single dial to a man's name, like you'd dial a record on a

juke box, and the telephone will dial the number, in Madison or any

place in the country.

"A Data-phone will let one computer talk to another, at the rate of a

full book of 50,000 words in 45 seconds, and they predict that one day

half of the phone lines will be filled with machines talking to machines.

"But . . . you get the idea."

Okay, let's see these complicated gadgets for direct distance dialing.

Your call comes first to a relay in a sender, says Guerten. It is about

the size of a deck of cards, in racks that stretch from floor to ceiling. As

the first numbers you dial come in, the relay whips off a message to a

"marker" and goes on to take the rest of your numbers and remember

them.

Tubes Flash

The marker looks like a Christmas tree of wires and tubes that go

upward in Yule tree fashion. The tubes flash dull red in rapid blinks,

which indicate that they are searching out the best route for your call and

whipping the information back to the sender.
3456 NATION' S MANPOWER REVOLUTION

They find a route in half a second, if all goes well, and it usually does.

If it doesn't go well, the marker trys a second time, again in a half

second.

If it doesn't make it this time, it turns the job over to another marker

and issues a call for human help, by flashing a light and ringing a bell

to show it's in trouble.

And it is then that one of the men in one of the better jobs shows up.

If the marker is successful, it tells the sender, which then makes your

call. Generally no more than 13 to 15 seconds have passed from the time

you quit dialing until the bell starts ringing at the number you're calling.

Costs Reduced

"Back in the 1920's, it took an average of 10 minutes to make the

call,- says Mayer. "You were tempted to shout, because it was the equivalent of talking with someone 80 feet away. Today, with the development

of new equipment, it's the equivalent of 6 feet.

"Back then, the call cost you $16.50, if it was coast-to-coast. Today

that cost has been cut to $1.75, or $1 after 9 p.m.

"And that's automation for you."

As you stand in this room, electronic devices are doing many another

job that people never did do.

Here's a gadget that goes to work at night, checking out 1,500 circuits

each night, like elves working for the shoemaker in the storybooks, and

leaving a list of circuits where trouble exists for the morning crew when

it arrives.

Busiest Circuits Found

Over here relay keys are being depressed, as by invisible fingers, as the

movement goes from row to row up to the ceiling. An electronic gadget

is trying out the circuits, over and over, to determine which are the

busiest, and where more capacity is needed.

Here's a man using a special "gun- to wrap wires around a connection

so tight that the man with the soldering iron has lost this job, and been

shifted to another. It was invented in the Bell laboratories.

On the other hand, look at all the transistors around. They were invented in the Bell laboratories a decade or so ago. They constitute a

$1 billion a year industry, which makes jobs all over the country, includ--

ing places in Madison outside the walls of the telephone office.

And the Bell system has spent more than $1 billion in research since

1920, and that has meant jobs by the hundreds, too.
NATION'S MANPOWER REVOLUTION 3457

Shift to Brains

Here's a microwave panel. Your calls to Dodgeville, Platteville, etc. go

out over air waves, not on wires and poles. And what's happened to the

man who set the poles, and serviced the wires?

He's lost his job, or a part of it, to the expert who knows the more

technical job of caring for this equipment.

And Brady can point out that, in the move to better jobs in the entire

telephone system in the country, the shift is to brains and more responsibility.

In the last five years in the nation, plant craftsmen went up by 18 per

cent; supervisory employes by 17 per cent, and business office and sales

employes by 15 per cent. And the fact that the payroll went up by 34 per

cent reflects the better rates the firm can pay and the better jobs that

have been created.

Hiring Patterns

This has been accompanied, Brady says, by changes in hiring patterns.

The company has learned to cushion automation by hiring temporary help

as automation occurs, and depending upon the naturally high attrition in

an industry where women predominate, to lessen its impact.

And the firm is paying more attention to the workers who will be permanent. There was a time when a lineman's job was a career job. Today

there are more linemen than ever before, but it's generally a stepping'

stone to a better job.

And the company wants to make sure that the individual they hire has

that capacity to go ahead.

Growing Fast

Down in another rack is where the television programs come in, for

sending to Madison stations for rebroadcast. This industry got its start on

a national network basis through the inventiveness of the telephone

system.

It's now a $4 billion a year industry. And that means jobs, lots a

them, in Madison and all over the country.

And that's the telephone company for you, trying out every new technique that it can to do a better job faster and at less cost.

And growing so fast that no one, not even the biggest of the computers, can gauge its impact on the economy of Madison and the nation

of which it is a part.

35-388 O-64-pt. 10 8
3458 NATION'S MANPOWER REVOLUTION

Concrete Proof of Push-Button Gains

(Sunday, November 28, 1963)

A few years ago, the Janesville Sand and Gravel Co., of Janesville, was

casting a speculative look at Madison.

Madison was booming with building. A lot of concrete was needed.

They produced sand and gravel for concrete. But how to break into the

Madison market with their own ready-mix business?

They found the key in merger and automation.

At the heart of their successful operation, in a merger with the Four

Lakes Fuel and Supply Co., is an intricate device called a Butler Bin

Model B-1 Push Card automatic batching system.

Push a queerly shaped card into its innards, set a dial or two, and

push a button, and sand and gravel starts flowing from bins into hoppers

where it's weighed, water and cement are added in just the right proportions, and in 20 seconds or so there's enough material to fill one of those

transport trucks you see going down the streets, with its revolving load

of concrete.

And it's done with a higher degree of accuracy, they say at Four Lakes,

than any human being can do the job alone.

This means a better concrete, they say.

And, as the word gets around, it means more sales.

The man who runs the push card automatic batcher most of the time

is Don Storkson, who is highly satisfied with the automatic batcher. He

ought to be. It means a lot less work for him.

His "office" is in a little room on high stilts, under which the trucks

run to be filled. It is warm. And dry. And he does his work by pushing

buttons, rather than running his legs off, as he used to do.

By standing in the door of his "office," he can see the site of his

former labors.

It's a big, squarish building between two railroad spur tracks. On one

side as many as 16 cars of sand and gravel from Janesville can be unloaded to an underground pit each day. As the materials are unloaded, a
NATION'S MANPOWER REVOLUTION 3459

conveyor takes them to the top of the building. There they are channelled

to the proper bin, in four grades.

Cat on the Roof

Each bin has a hopper bottom, with a weight hopper underneath. The

four bins front on a walkway which Storkson once patrolled on a run.

When he got an order for concrete, he'd figure his proportions, then

he'd start one bin to emptying into the weight hopper underneath. Then

he'd dash to the next, keeping a concerned eye on the scale of the first

weight hopper to make sure that he wasn't getting too much in it, then

dash to the third.

It was strictly cat on a hot tin roof.

And if he got too much sand in one batch, he had to make the proper

adjustments to get it just right. Then he emptied the weight hoppers via

gravity to a conveyor belt below which took it to a mixer. There the water

was added and the batch mixed before going to the truck.

It took seven or eight minutes before the concrete hit the truck. And,

in addition to Storkson, there was a man on the mixer and a yard

superintendent.

Special Card

Today, Storkson gets the order and picks one of the queerly shaped

cards off a rack. It has been specially tailored to the customer's needs, by

a specialist in Janesville. Storkson slips the card into the automatic

batcher, and the card tells the electronic device what proportions of sand,

two grades of gravel, cement, water, and whatever additives might be

needed for this batch.

He sets a dial for the number of cubic yards he needs. Moisture is

critical in concrete, for too much water in relation to cement can rob a

batch of strength. So he checks a gadget that tells him how much moisture

is in the sand, where most of the water lurks.

He sets a dial to this percentage figure, and now the machine will add

just the right amount of water. An amber "Ready to Batch" light glows.

He pushes a button, and looks at a bank of lights on his console.

If any of the weight hoppers has been overfilled, a red light for that

bin in the upper bank will glow, and the amount will register on a scale

above the console. If any weight hopper is underfilled, a light in the second bank will glow. If they're all all right, a bottom row of amber lights

will •glow.

Catches Error

If there's an error, and it's seldom ,there is, he can switch the device to

manual operation and push a button to fill underfilled weight hoppers, or
3460 NATION'S MANPOWER REVOLUTION

set the bins to emptying and stop an overweight hopper at just the right

time to hold back the surplus material.

And if he should get careless and overlook the warning lights. the

"Batch" button won't depress and he'll have to look for the trouble.

On the average, he can have the concrete batch flowing to the truck in

less than two minutes.

-By the use of this automated equipment, we can produce 140 cubic

yards of concrete per hour, as compared with 40 yards under the old system," says Goodwin Lyons, Janesville, president of the Four Lakes plant.

"More than that, we're producing a better quality of concrete through

virtual elimination of human error. The machine doesn't become preoccupied with its relations with its in-laws, staying out too late at a party the

night before, or just plain being tired.

Does Job Faster

"It does the job that humans tell it to do and, assuming that we tell it

to do the job right the first time, it does it time after time, without change

and faster than a human being can do it."

And what's happened to the human factor?

Well, Storkson is still there, doing his batching from a warm, dry room

with a push of the button rather than running up and down the formerly

damp and poorly lit room with its bins and weight hoppers.

The man on the mixer in the old plant has lost that job, since the

batches are now mixed in transit on new and larger trucks. But he has

become the plant foreman.

Work Force Increases

And the man he replaced? He's gone on to become the plant foreman in the Midwest Concrete Corp. on the East side of Madison, a plant

which is also a subsidiary of the Janesville Sand and Gravel Co., whose

president is Ellis Jensen, also a regent of the University of Wisconsin.

"Actually, the work force in Madison has increased by more than 25

per cent since we went to automation," says Lyons.

"And that increase would not have been possible for us without

automation."
NATION'S MANPOWER REVOLUTION 3461

VI

Oscar Mayer's Growth Is Automatic

(Sunday, December 1, 1963)

Mention automation at Oscar Mayer and Co., and all eyes turn toward

the wiener tunnel.

At the head of the wiener tunnel stands one man, superintending 10

lines of wieners as they march into the tunnel.

A lot of mysterious and highly secret things happen to the wieners as

they go through the tunnel, involving trade secrets competitors would like

to know.

Hours to Minutes

They're gone from view for some 36 minutes, and then they march

out the other end of the wiener tunnel, having completed in the 36 minutes a process that used to take 36 hours.

A couple of men check the marching wieners as they emerge.

And the tunnel in between is doing a job that was once back-breaking

work for men.

Where Are Men?

Men used to scoop the meat into grinders, then scoop the ground meat

into stuffers. Men used to operate the stuffers. Other men would put the

wieners on "trees" and hang them in smoking chambers.

Now they don't. And what's happened to the people who have seen

the machines take over their jobs?

Again, it's highly complicated. Again there's been a shift of people

within the plant, as much as possible, and a cushioning of the changes

through attrition where possible. Research has created new jobs. Yet . . . .

"We had 2,785 men and women in plant production in 1961," says

Paul Bowman, Madison plant manager. "That was before the wiener

tunnel was in operation. Today we have 2,787—two more."
3462 NATION'S MANPOWER REVOLUTION

Union's Concern

Across the street, in the building of the Amalgamated Meat Cutters

and Butcher Workmen, Local 538, Cal Rush, the business manager, corroborates this when he says:

"The membership has stayed normal for the last three years, all right.

It's now 2,700 in the plant.

"Our main concern, however, is for jobs for women. At lot of women's

jobs have been lost, mainly the women who used to skin the wieners.

The fact that our membership has stayed the same means that more men,

and fewer women, are working at the plant."

This takes us back to the far end of the wiener tunnel, where the 10

lines of wieners march out, at the rate of 25,000 per hour, under the

watchful eyes of the two men.

'Squeaky Wrist'

Oscar Mayer used to have some 200 women skinning wieners, jobs

which no longer exist. Advancements in wiener technique created these

jobs back in 1934, and the newest advancement has taken them away

again.

Back in 1934, Oscar Mayer decided to leave the time honored technique of inserting the sausage meat inside a natural casing which was

either tough for the customer to chew or hard to remove.

Mechanical Knives

They developed a cellulose material which could be stripped off before

the wiener was sOld to the customer. This job required women. It was

tedious and monotonous, but it was a job. Women developed something

they called "squeaky wrist," which was painful. And Oscar Mayer wanted

a better process.

So now as the marching lines of wieners come out of the wiener tunnel,

10 sharp little knives slit their casings, and there have gone the jobs for

the women.

More than that, a few years ago the quick fingers of women used to

pick up the wieners and put them in a package, loosely packed and shippable only moderatz. distances.

Today, at the far end of the wiener tunnel, the wieners march along

their production line to where vacuum gadgets drop down on them, -pick

them up 10 at a time, and put them in trays marching off at right angles

and into a complicated device which automatically vacuum packs them_

in plastic wrappers.

In the process, there are 10 less jobs for women than there used to be.
NATION'S MANPOWER REVOLUTION 3463

"And now we can ship them to much more distant markets," says

Bowman. "Their shelf life is much longer. That means more work for

this plant and more jobs for Madison people, buying the materials from

the farm, trucking them to market, packing the product on cars for shipment, selling it to customers—there just isn't any end."

The women aren't at the end of the wiener tunnel, but new jobs have

been created and old jobs enlarged.

And who can say exactly where the gain and loss is?

More Production

Rush, the labor man, points out that while the labor force hasn't been

cut, there's a lot more production. And this new production is being accomplished with fewer people. The loss isn't so much in present jobs as

the jobs of the future that the machines—not people—do.

The net sales of the company indicate growth. They were $270 million

in 1962 as compared with $209 million 10 years before, or 29 per cent

higher.

But they reflect the entire Oscar Mayer operation, with six plants and

15 distribution centers about the country.

Other Products

A more accurate figure, Bowman feels, is the plant production, where

his figures show a 5 per cent rise.

And Rush points out that a part of the impact of the loss of women

wiener stripping jobs has been taken up by the facts that the farmers are

selling their meat animals the year 'round, and that Oscar Mayer is making more cold luncheon meat, more sausages in Saran plastic films.

Research Effort

To this, Oscar Mayer says, "Amen, and we planned it that way. It

didn't just happen."

Back in 1941, Oscar Mayer established its first research laboratory in

the Madison plant. They came up with the Chub pack machine for meats

and sausage in 1949; the slice-pack for cold cuts in 1950, and the famous

Smokie links in 1951.

All of them have created jobs for people in Madison.

And, probably more important, they have created a stability of wprk

force.

"When I first came here," says Bowman, "it was normal to lay off 200

or 300 men at a crack, when the winter heavy kill had ended, for

instance.
3464 NATION'S MANPOWER REVOLUTION

Summer Work

"So we sought out a means of creating summer work, so that we could

keep people the year around. It's worked out quite well."

He stops, on a tour of the plant, at a Chub pack machine. Liver sausage

under pressure, is coming out of a stainless steel tube and automatically

being packaged in uniform plastic tubes.

"The machine does the work of the man who used to fill the stuffer,

and the man who filled the casing, and the man who washed it and more,"

says Bowman.

Larger Market

"On the other hand, it means that we now can ship our product farther.

When this company started in Chicago, back in 1883, the business was

limited to the immediate neighborhood and a few miles beyond.

"Today, we're shipping these Chub-packs all over the nation, and to

the military in Japan and Germany as well."

The new packing procedures mean that Oscar Mayer, which had been

setting up packing plants in many parts of the country so that they'd be

close to the people who'd eat their product, have now begun reversing

this procedure.

The result is that there is more production coming back to Madison

and more jobs here.

Machines Patented

But aren't there other jobs lost elsewhere by companies not as aggressive as Oscar Mayer? Possibly, but . . . who knows?

And another feature is that Oscar Mayer has patented some of these

machines invented in their plant. Those plastic tubes of cookie dough

you see on the grocery shelves are made on machines which saw the light

of day thanks to Oscar Mayer.

They're creating more jobs, but how many no one can say.

There's another side to automation at Oscar Mayer and Co.—in the

business office where computers whip through jobs in split seconds that

once took hours or days.

There's a room filled with girls wearing telephone headsets, taking orders from salesmen working with 40,000 customers throughout the country. Here's an order from Philadelphia, for instance. The girl touches keys

of a machine as the salesman "talks in" the order. A card comes out of

the machine.
NATION' S MANPOWER REVOLUTION 3465

Electronic Orders

It goes to the next room, where a computer awaits. It whips out the

order quick-as-a-wink in duplicate, printing the name of the customer,

what he wants, how much of it he wants, and all the rest. The shipping

room gets the order far faster than ever before. And the machine adds

up the cost of so many wieners at so much a pound, etc., and gives the

final total.

More than that, the computer is "remembering" all of the transactions.

At the end •of the day, it will tell the firm just how much of what they

sold and at what prices.

Cost Figures

Nor is this all. During the day, they're adding all the costs of production into the machine. And at the end of the week, the machine will tell

them the profit and loss on the entire operation.

It'll give them the profit and loss of each salesmen's route. It'll tell

them what price they ought to pay for what cuts of meat. And, if they

see a competitor without a computer paying too much, they just stay away

from that particular meat.

In between times, it figures the payroll, and it makes adjustments in the

recipes for such products as Smokie links so that each batch of meat—

which differs from every other batch—will come out tasting the same.

Furthermore, the computer makes a lot of formerly executive decisions

for the firm.

"We simply set up an acceptable range of decisions, and the computer

makes them," says Bowman. "This weeds out a lot of the simpler decisions, and leaves humans more time for the more complicated ones."

Bigger Memory

The computer used to get along on a memory core capable of storing

20,000 bits of information. Now the old core stands in a corner, and a new

memory with a capacity of 40,000 bits of information is going in.

The electronic gadgets, in their last improvement, do the work of 15

women. With a 15 per cent turnover each year, it's easy to make the

change without much of any fuss through attrition. The jobs are gone.

But . . .

"The profits in the meat packing industry are traditionally small," says

Bowman. "In the entire industry, an average of eight-tenths of 1 per cent

of each dollar of sales represents the net income.
3466 NATION'S MANPOWER REVOLUTION

Industry Leader

"Oscar Mayer last year netted 1 and six tenths of a cent per $1 sales

to lead all the industry. We have led it for nine years, and it looks like

the 10th year is coming up. This means that we can put more money into

research and into equipment.

"And that, in turn, means that we can do just that much better job for

our customers, for our stockholders, and for the people who work at our

plant."
NATION'S MANPOWER REVOLUTION 3467

VII

Labor Looks at Automation

(Thursday, December 5, 1963)

Madison labor looks at automation from the standpoint of people more

than any other group in the city.

For them, automation means a worker who has put in 25 or 30 years

on the same job standing before the desk of a union business agent and

explaining that a machine is now doing the work he used to do, and . . .

where does he go from here?

"You can talk all you want to about automation being the harmless successor to the Industrial Revolution, the easy retraining of employes to

better jobs, and the better life to come," says Marvin Brickson, president of the Madison Federation of Labor, AFL-CIO.

"But this is today, and here's a human being, with kids in school

and a mortgage on his house, and there's nothing else that he can do."

Perhaps he -should have gone to the Vocational school and learned new

skills. But he didn't. And now he's out of work. Today.

Not As Hard Here

Fortunately for Madison, automation isn't hitting Madison's blue collar

worker as hard here as it is in other places. For one thing, there aren't as

many here as there are in other towns.

But labor here is fully aware of such statements as those of John I.

Snyder, chairman and president of U.S. Industries, Inc., who says:

"Some four million of our people, or 5.5 per cent of our labor force,

are without jobs. More than 2.5 million have completely exhausted all

their employment benefits.

"At least one out of five people working today will almost certainly be

unemployed some time during next year and upwards of 2.5 million will

have to settle for part-time jobs because no full-time work will be available to them."

This sounds grim, and all the more so since Snyder is the chief executive officer of one of the country's leading manufacturers of automated
3468 NATION' S MANPOWER REVOLUTION

equipment for industry, trying to find a way to cushion the effects of the

machines he's making.

'Quiet Firing'

"He says that 40,000 jobs are being eliminated by what is called 'quiet

firing,' " says Brickson. "Actually, no one's fired. A person may be moved

to another job in a growing business. He may be kept at his same salary

on the new job that the machine is doing, but not replaced when he quits

or retires. But then the job is gone."

And this, he says, is happening in Madison as far as many blue collar

workers are concerned.

"Some of the union contracts being written in Madison now contain

automation clauses," says Brickson. "The first one was the one for the

Office Employes Local No. 39. But, while you can write into a contract

that no one now on a job will lose that job, or lose a job with the same

wages, because of automation, so far no one's written a contract that

guarantees that that job will be filled in the future.

"And that's the danger of silent automation."

White Collar Jobs Hit

The Office Employes union, he says, contains some 300 or more members who work mainly for Madison Gas and Electric Co., CUNA Credit

Union, and CUNA Mutual Insurance Society.

"In all the talk about automation and the blue collar worker, some people tend to forget that automation is hitting the white collar worker as

well," says Brickson.

"At the heart of many job losses through automation, or silent automation, is the computer, and many of the jobs lost are in government work.

When the United States Census was taken in 1950, it took 4,100 statisticians. By the time that the 1960 census was taken, many more computers

were in operation and it took only 50 statisticians."

The reason he emphasizes this, he says, is that Madison—with its federal, state, county, and city pay rolls—has a lot of government employes.

"There are 85,400 non-farm members of the Dane county work force,"

says Brickson, "and 29,100—or more than one-third—are in government

work."

The computers, he says, are causing a shift in the proportion of jobs

held by women.

Team Solution Urged

The answers to the question of how to live with automation, he feels,

must be sought by government, industry, and labor as a team, for no One

can do the job alone.
NATION'S MANPOWER REVOLUTION 3469

And he feels that the benefits of automation, from the profit standpoint,

will have to be spread past industry and to the workers in the form of

shorter work week, longer vacations, increased pensions, and pensions at

an earlier age.

The steelworking industry, he notes, is now granting 13-week sabbaticals every five years to senior workers, and the 35-hour week is more and

more widely accepted.

In Madison, the 37/1 2 hour week is entering the picture, but Brickson

points out that it's been a long time since the last full five-hour drop in

the work week.

"The 40-hour work week is now 30 years old," he says. "It came into

the picture in 1933. Before that, the drop had been about five hours each

decade back to the first of the century when the painters, for instance,

worked as much as 70 hours a week.

"Their first contract here in Madison, for instance, was a 60 hour week

and 20 cents an hour."

Twin Brother

Though automation has not had too much effect on many of the union

men in town, its twin brother—technological change—has.

The carpenters are getting only about 60 per cent of the man-hours

you'd expect, he says, due to such changes as power saws, power nailers,

pre-hung doors, windows that come in units, and the like.

The need for common laborers has been tremendously reduced by cranes

that lift materials once carried by men to the tops of buildings, power

shovels that lift tons instead of pounds, or pumps that push plaster

through pipes instead of having the man with hod carry it.

A typical story of technological change is that of Harold Rohr, business

agent for the Painters Local Union 802.

"Take a look at the State Office building out at the Hill Farms" says

Rohr. "We ought to have 15 or 20 men on that job for six months.

What'd we have? Three for 11 months.

"Madison union painters got 33 man-months of work, instead of 120.

Instead of working 10/1 2 to 11 months a year, our painters are working

around seven months.

"Sure, they make $3.73 an hour, but they average only about $5,000

a year."

Pre-Finished

What's making the difference?

"Everything's going pre-finished or plastic," says Rohr. "We used to

paint a whole room. Now the floor is pre-finished tile, and the baseboard
3470 NATION'S MANPOWER REVOLUTION

is rubber and doesn't need a finish. The windows are aluminum and don't

need paint, and the trim may be prefinished. The ceiling is probably

acoustic tile, and finished. We're lucky to get from one to three side-walls

to paint."

The painters local is attempting to get local suppliers to put in their

prefinishing plants but, "it's rough when you have to compete with somebody getting maybe $2 an hour in a plant up at Wisconsin Rapids," says

Rohr.

More than that, they're becoming acutely aware of the need for more

education and better education for labor.

"There was a time when the strong back was all you needed for a job,"

says Brickson. "Well, it's no guarantee of a job today."

There are a limited number of apprenticeships open. The labor groups

have set-up a high school diploma as one requisite to getting the best

people for these few jobs.

"And that makes it tough on the high school drop-out," says Brickson.
NATION'S MANPOWER REVOLUTION 3471

VIII

Automation Vital to Insurance Firms

(Sunday, December 8, 1963)

Insurance is a big business in Madison.

There are 27 companies with home offices here. They employ thousands

of persons directly; they give indirect employment to thousands more.

Automation is coming to these Madison companies on a big scale.

American Family Mutual Insurance Co. has a big room filled with

electronic devices which are doing jobs that people used to do. They take

automation pretty calmly.

Competitive Matter

For one thing, the insurance business is highly competitive. If they

.didn't use more machines, their competitors would and they'd suffer.

Their employment would suffer, too, they say.

Since 1942, when the firm quit the old hand ledgers for the newest

and best mechanical equipment, they've been growing.

"In 1942, we had an even 100 employes," says Robert Kelliher, director

of office administration. "Today we have 820, in spite of all the labor

saving machines we've added."

The newest change came a year ago in the form of an IBM 1410 computer which added 8,000 five-digit figures a second.

Sophisticated Gear

"A few years ago, we saw that we were going to have a problem getting out the work we could anticipate in another several years," says Kelliher. "Our RAMAC system just wasn't fast enough. To expand it would

require another 55 clerical persons.

"And even then, our competition, with more sophisticated machines,

would be able to do the work at a lower cost, and do a better and faster

job for the customer in speed of work, accuracy, and the new types of

policies for which rates could be so easily calculated on the new machines."

He gestures to the main work room of the insurance firm, where virtually no one's using a bookkeeping machine.
3472 NATION'S MANPOWER REVOLUTION

"We'd have to have that whole room filled with girls at bookkeeping

machines and typing," he says, "if we didn't have this—computer and

high speed printer."

Swift Printing

The printer takes about as much room as a desk at which a single typist

would sit. It prints renewal notices, new policies, amended policies, and

premium notices quite rapidly.

It prints typed material at a rate of 1,300 letters a second.

But how about the 55 clerical workers whose work the machines are

now doing?

"Our growth has been such that no one has been laid off because of the

machines," says Kelliher. "There's been shifting of jobs, but no separations of people from jobs."

Taped Information

Furthermore, says William Werner, supervisor of electronic data processing at the firm, the computer enables them to keep on top of their job

as they never did before.

"These eight reels of tape," he says, "contain all of the vital information

on our 760,000 policies—the name of the insured, his address, the name

and year and model of his car, what coverage he has, and all the rest.

"The information is constantly changing, .as you might expect. Among

760,000 insureds, there is constant changing of addresses, automobiles,

coverage, and all the rest. And these master controls are up to date within

hours."

How It Works

How's it done?

Each day, the 1,500 agents of the company write or phone in changes,

along with new policies or orders to drop old policies. Underwriters decide whether to accept the new policies. Rates are applied. The information is punched into cards in code form. The cards whip through a machine, and a work tape comes out.

The master tape goes onto one machine, and the work tape on another.

A new master tape emerges, with all the changes made.

"In three hours and five minutes, the entire job is done," says Werner.

"By the next morning, we're up to date as of 4 p.m. the day before."

Premium Notices

The computer does a lot more than that. As it encounters a new

policy on the work tape, it whips the information off in a new direction to emerge on a tape of its own.
NATION'S MANPOWER REVOLUTION 3473

Girls used to type out these policies, but now the high speed printer

does the job.

The computer also takes care of premium notices amending policies,

changing your address or makes of cars, or renewal notices.

There also is a machine in St. Joseph, Mo., that talks to a machine here.

American Family has a regional office in St. Joseph, and the St. Joseph

office has a teleprocessing machine.

Telephone Report

They fit the day's business, in the form of punched cards, into the machine in St. Joseph. Electronic impulses travel a telephone line to Madison,

and a similar machine in Madison punches identical cards here for the

computer to work with.

Nor is this all. The computer assembles all sorts of information on command. If you want to know how much the losses are on 1954 Ford cars

driven by rural youths between the ages of 18 and 21, the machine will

tell you.

We're able to pinpoint losses so we can establish the highest premiums

where they belong and, conversely, give the best possible rates to those

good drivers of good cars who should get the benefit," says Kelliher.

They get the information in hours, instead of months, this enables

them to beat competition or, at the least, keep up with it.

35-388 O-64-pt. 10-.9
3474 NATION' S MANPOWER REVOLUTION

Programmers' Jobs

Telling the machine what to do is a job that requires the services of four

people called programmers. It is an intricate job, and time consuming.

The instruction to the computer to tell it what to do with the master tape,

for instance, took most of one year for one man.

But has the mechanization resulted in long lines of women, particularly,

at the personnel office, seeking jobs?

-Not that I notice," says Norbert Vanden Heuvel, personnel director.

-Our basic requirements haven't changed much in recent years, and the

numbers of persons seeking jobs has changed little in pattern."

Jobs Available

Just to make sure that the experience was general, a check was made

with Clyde Selix, partner in Placements of Madison and Girl Friday.

"There's a shortage in Madison of well-qualified women for white collar

jobs," says Selix. "One reason may be that, since World War II, the requirements for women may have been relaxed to the point where they've

let training slip, or they just don't produce.

"The girl, however, who has a sense of responsibility, is an even moderately good typist, has a good job history, can spell, can punctuate, and

can set up a letter by herself when the boss says, 'Tell Joe politely we

don't want any' isn't going to have any trouble getting a job in Madison."

"As a matter of fact, if she can't get a good job in a week, she'd starve

to death at a free picnic."
NATION'S MANPOWER REVOLUTION 3475

EXCERPT FROM STATEMENT OF WALTER P. REUTHER, VICE-PRESIDENT, AFL-CIO,

BEFORE SUBCOMMITTEE ON EMPLOYMENT AND MANPOWER, MAY 22, 1963

THE ACCELERATING TECHNOLOGICAL REVOLUTION

The accelerating technological revolution brooks no delay in establishing a

comprehensive manpower policy and program. The pace of change in the labor

market is determined mainly by the pace of technological advance. With more

rapid change in technology, there is corresponding acceleration in the rate at

which changes occur in educational and skill requirements for employment and in

the kinds of jobs available and the places where they are available.

Thus the extent of the labor market adjustments with which we must cope today are greater than they were yesterday and will be still greater tomorrow.

In consequence, the need to develop and implement an effective manpower policy

becomes daily more urgent.

This need is underscored by the evidence that productivity, which reflects

improvements in technology, has tended historically to accelerate. The attention of economists has only recently been attracted to the phenomenon of acceleration. For too long they misled themselves and the public by projecting

productivity into the future on the basis of the long-term average rate of past

productivity gains. In so doing, they ignored the fact that their averages were

a combination of relatively low rates in the distant past with significantly higher

rates in more recent years. Their projections, therefore, underestimated future

productivity gains and contributed to complacency toward the magnitude of our

full employment, economic growth, and manpower adjustment problems.

But there is increasing recognition among responsible scholars who have taken

the trouble to look at the facts that, if we take past rates of productivity advance as our guide to the future, we will be badly in error. They recognize

that acceleration of the rate of productivity advance goes far back into human

history; and assurance that acceleration will continue for some time to come

is given by such factors as enormous increases in expenditures on scientific and

technological research, rising levels of education, major technological breakthroughs exemplified by automation, and the application of computers and atomic

and solar energy to industry.

The late Prof. Sumner Slichter was among the first to recognize the strong

tendency of productivity to accelerate. In the book, "Economic Growth in the

United States," published after his death, he wrote:

"Although statistics on production are available for only about the last century

or century and a half, it is evident that during most of the world's history output

per man-hour must have been growing very, very slowly or not growing at all.

This conculsion can be demonstrated by projecting backward various rates of

growth. Unless an extremely slow rate of growth is used, the backward projection soon gives amounts of productivity that are unrealistically low—in fact, so

low as to be insufficient to support life."

By contrast, he pointed out:

"During the first half of the 19th century, productivity per man-hour in the

United States may have increased as much as 25 percent. In the second half

of the century, it doubled, and in the first half of the 20th century it almost

trebled."

Focusing on relatively recent periods, Solomon Fabricant, Director of Research

of the National Bureau of Economic Research, noted the same phenomenon

in the Bureau's 1959 annual report. He wrote:

"Also a fact of great importance, the long-term pace of advances in output

per man-hour has speeded up. It was 22 percent per decade during the quarter

century preceding World War I. It has averaged 29 percent since. During the

most recent period—after World War II—national product per man-hour has

been rising at an even greater rate, 35 to 40 percent per decade."
3476 NATION'S MANPOWER REVOLUTION

The degree of accleration in productivity during this century becomes apparent from statistical trend analysis of BLS figures on output per man-hour

worked in the U.S. private economy as a whole which covers the period 1909-62.

Such analysis, made independently by BLS and by the UAW's technicians,

show that, despite the retarding effects of recessions and wars, there has been

strong and persistent acceleration in the "normal" rate-of-productivity advance—

from a rate of 0.9 percent a year in 1909 to approximately 4 percent today.

It is significant that, during the period of relatively full employment from

1947 to 1953, productivity in the private economy registered an actual increase

averaging 4% percent a year. The lower rates of more recent years undoubtedly

reflect the repeated recessions and persistent economic slack of the years since

1953. As the Manpower Report of the President cautiously notes:

"Although the statistical data on this subject are too limited to warrant definitive conclusions, it is probable that underutilization of plant, equipment, and

manpower resources has had a significant effect in retarding productivity gains

since the mid-1950's."

Under the stimulus of automation and other revolutionary technologies, there

can be no doubt the historical tendency for productivity to move forward at an

accelerating pace will continue into the foreseeable future.

[From Manpower Report of the President, March 19641

PRODUCTIVITY, CHANGING TECHNOLOGY, AND EMPLOYMENT

The persistent high levels of unemployment have evoked wide concern as to

the pace of technological change and its effects on employment opportunities,

This concern is occasioned by knowledge of the employment cutbacks which

have attended the changeover to automation in some plants, and by frequent

reports of new and improved devices which could be substituted for human labor

in ever-widening areas of activity. Yet automation is generating jobs as well as

eliminating them—in part through direct creation of new jobs, in part through

stimulation of economic growth. And it can be convincingly argued that,

according to the record of economic history, the longrun effect of technological

advance has so far been to increase employment, as well as to raise per capita

income, and to remove much of the drudgery from work. The most recent

phase of technological progress may well have similarly favorable longrun

consequences.

Two basic propositions are generally agreed upon in considering these and related

questions: First, that continued rapid technological progress is essential to the

economic strength of the Nation and to the achievement of further advances in

levels of living for the American people; and second, that the brunt of the adjustment to technological change should not continue to fall on individual workers

and their families but must be shared by society as a whole. The steps required

to minimize and mitigate the dislocating effects on individuals must be resolutely

taken—by employers, unions, Government agencies, and other concerned groups.

In planning both overall economic policy aimed at stimulating employment

growth and measures to amerliorate the adjustment problems for workers affected by technological change, factual information on the current pace of such

change and its present and prospective impact on employment and occupational

requirements is of obvious importance. This chapter represents a first progress

report on findings of the Department of Labor's recently expanded program for

assessing the available data on these subjects and for developing the body of

statistical and other information needed with regard to them.
NATION'S MANPOWER REVOLUTION 3477

In this discussion, technological change is regarded as embracing all the many

types of innovations which result from the application of scientific and engineering

knowledge and techniques to the processes of production and distribution. In

general, the purpose of such change is either the production of new or improved

goods or services, or greater efficiency of operations and consequent cost savings.

The term "automation" has been given widely varied meanings by different

authors. This coined word, derived from "automatization," was used originally

to denote certain technical innovations in metalworking industries, involving

mass-production machinery with a high degree of automatic operation. Later,

the term was applied to electronic computers and to automatic control devices

which can measure and adjust performance. These developments are often cited

as examples of the advanced stage of technology where mechanisms are used in

place of human labor to monitor as well as perform work. It is in this general

sense that the term is used in the present report.'

Both theoretical and practical difficulties have so far prevented the development

of direct statistical measures of technological change—except for a few types of

innovations (notably, electronic computers, on which statistics are presented later

in this chapter).2 In efforts to assess the pace of such change, reliance has therefore to be placed on analysis of related statistical series, descriptive data, or a

combination of the two.

Among the most important indirect indicators of the rate of technological

change are the indexes of man-hour productivity issued by the Department of

Labor for many years. Though influenced also by a variety of other factors—

including production levels, changes in capital investment per worker, education,

and the skills of the work force—the rates of change in productivity provide

valuable insights into the pace of technological progress in American business and

industry.

Total private economy

Productivity (output per man-hour) in the private economy of the United

States rose at an average rate of 2.4 percent a year over the half century covered

by the index 1909-63.2 During the postwar period 1947-63, the increase averaged

3 percent.

The increase for the past 3 years, 1960-63, averaged 3.6 percent. While this is

a relatively high rate for a 3-year period, it should be noted that the private

economy has achieved equal or higher 3-year rates several times in the past. In

the immediate postwar readjustment years 1947-50, productivity rose at an average rate of 4.3 percent. And in the years 1952-55, the rate of gain was again

relatively high, 3.3 percent.

Another reason for caution in drawing conclusions from the productivity gains

of the past 3 Years is that, if the period covered by the analysis is extended, the

findings appear substantially different. For the period 1958-63, the average

increase in productivity is estimated at 3.1 percent, little above the 3-percent

average for the entire postwar period.

PRODUCTIVITY TRENDS

In contrast to this meaning, a definition of automation as "a new way of organizing and analyzing production, a concern with production processes as a system, and a consideration of each element as part of the

system" was recently given by a leading expert. Furthermore, the meaning of the term is often extended

popularly to cover all types of technological change, including labor-saving machinery of conventional as

well as advanced design, and the application of scientific management methods. So broadly defined,

automation becomes a loose abstraction, standing for the far-reaching impact of technical change on American industry and manpower.

2 See p. 53.

3 Output per man-hour here refers to the constant dollar value of goods and services produced, in relation

to the hours of all persons employed (including proprietors and unpaid family workers). The output

concept is consistent with that of gross national product and is measured in terms of 1954 dollars. The

man-hours are based primarily on establishement reports to the Bureau of Labor Statistics. Another

series of estimates of output per man-hour have also been developed, based on man-hour data from the labor

force statistics. In general, the two series show similar movements over the postwar period.
3478 NATION'S MANPOWER REVOLUTION

Year-to-year changes in productivity are more closely related to changes in

production levels than to any other factor. In general, the largest gains are

registered in years of upswing in the business cycle. The rise in output per manhour was sharp in the recovery years 1950, 1955, 1959, and 1962. (See table 9.)

TABLE 9.-Year-to-year percent change in output per man-hour,' 1947-63

Period

Total

private

economy

Agriculture

Nonagricultural

industries

Period

Total

private

economy

Agriculture

Nonagricultural

industries

1947-48 3.5 18.7 2.1 1955-56 0.1 2.2 -0.4

1948-49 2.9 -4.7 3.7 1956-57 3.5 6.7 2.8

1949-50 7.2 13.9 5.3 1957-58 2.5 9.3 1.8

1950-51 2.5 -1.1 1.6 1958-59 3.6 -.2 3.6

1951-52 2.2 9.2 1.3 1959-60 1.9 6.3 1.6

1952-53 4.1 11.3 2.7 1960-61 3.3 5.9 2.9

1953-54 1.8 7.2 1.6 1961-62 3.9 3.4 3.8

1954-55 4.5 3.6 4.3 1962-63 2 3.5 7.4 3.0

1 Output refers to gross national product in constant dollars. The man-hour data are based primarily on

establishment reports to the Bureau of Labor Statistics.

2 Preliminary.

The generally rising trend in productivity which underlies these cyclical swings

-which has been a major element in the country's economic growth and the rising

standard of living-is the outcome of a variety of factors.4 Among these are

technological advances, capital investment, and scientific and engineering research

and development. These factors have a complex interrelationship. Advances

in technology are made possible by research and development but are realized

through capital investment. Growth in capital spending is stimulated, in turn,

by the opportunities for more efficient operations and new and improved products

provided by advances in technology-with the total effect of increasing

productivity.

Over the long run, education is also an important factor in productivity gains

and the country's economic expansion-through its contribution to scientific and

technological progress and the quality of the labor force. Recent private studies

have emphasized education's contribution to our ecomomic advance to date.

One such study found, for example, that two-fifths of the increase in real product

per worker over the period 1929-57-a gain of 56 percent-could be attributed

to increasing formal education.5

The influence of education on productivity is longer term and more indirect

than that of the other factors mentioned. It is brought to bear, in large part,

as highly educated administrators effect improvements in organization and operations, and as the knowledge of scientists and engineers is realized in technological

progress.

On the other hand, advances in education and productivity are mutually reinforcing. As productivity rises, the higher incomes that are generated help young

people to stay in school longer and make it easier for experienced workers to leave

the labor force for further education or training. Through the increased knowledge and skills thus acquired, these workers and potential workers can then contribute to further gains in productivity and economic growth.6

Industry sectors

The great differences in productivity trends among the various sectors of the

economy reflect, in large measure, the widely varying rates and character of

technological advances in these sectors, as well as fluctuations in production levels,

4 For a more extensive discussion cf these factors, see the 1963 "Manpower Report of the President,''

pp. 73-76. _

5 "The Sources of Economic Growth in the United States," Supplementary Paper No. 13, Edward F.

Denison, Committee for Economic Development, January 1962, p. 73; and hearings before the Subcommittee

on Education, Committee on Labor and Public Welfare, U.S. Senate, 88th Cong., 1st sess., Apr. 29-30

and May 1, 1963, vol. 1, p. 408.

Closely related to the rising educational level of the population and hence to productivity gains is the

increase in total expenditures for education in the United States. Expenditures for education as a per-cent

of national income dropped considerably during the depression and war years of the 1930's and 1940's, but

have climbed steadily throughout the postwar period. The 1962 figure of 7 percent of the national income

devoted to education compares with a 1929 figure of 4.7 percent.
NATION'S MANPOWER REVOLUTION 3479

changes in production capacity, and other economic factors having a differential

effect on different industries.7

Agriculture has, in the postwar period as a whole, outdistanced the nonagricultural economy in productivity gains. (See chart 12.) The average annual

increase in farm output per man-hour from 1947 to 1963 was 5.7 percent, an

extremely high rate for such a long period and just under 2% times the corresponding postwar average (2.4 percent) for all nonfarm private industry.

c it 12 INDEXES OF OUTPUT, EMPLOYMENT,,,AND

OUTPUT PER MAN-HOUR, 1941-63

To) tAtt

TOTAL PRIVATE ECONOMY

€€€€€

,J1947100),,,,„_.„

OUTPUT

EMPLOYMENT

o.

..........

OUTPUT PER MAN-HOUR

AGRICULTURE

OUTPUT PER MAN-HOUR

- 

...................

€S 4

1647 48 49 51

97 55 440 el 62 196.

OUTPUT

... . 

.....

EMPLOYMENT

54 55 56 5,7

it 

58 59 60 61 62 -1963

: ,--

',',.., L NONAGRICULTURAL INDUSTRIES

OUTPUT N

;•,,,'; r-- 

.......... ,,,,.... :,x, ......... . .............

17€") fr-

€ 

.....,,,-,„ ,•

••••••••

EMPLOYMENT

OUTPUT PER MAN•14OUR

1I I / I 1 I _1 j 

1947 49 49 50 51 62 93 64 95 09 57 56 69 60 91 15

00,040,

7 It will be noted that the discussion of productivity in this section, as in the preceding ones, is limited

to the private economy since no satisfactory method has been found for measuring productivity in the

Federal Government. However, a positive and vigorous effort to devise ways to measure productivity

and to improve manpower utilization is being made within the executive branch of the Federal Government, and examples of dramatic increases in productivity in a number of agencies can be cited. See

"Examples of Improved Manpower Management Plans, Programs, and Accomplishments Developed by

the Departments and Agencies of the Federal Government During the Fiscal Year 1963," Subcommittee

on Manpower Utilization of the Committee on Post Office and Civil Service, 88th Cong., 1st sess., Oct.

16, 1963.
3480 NATION'S MANPOWER REVOLUTION

Rapid and widespread technological advances of many kinds-in farm machinery, fertilizers, pesticides, crops, and livestock-are the basic reason for this productivity record.' But other factors have also had a sharp effect, especially on

the short-run fluctuations in farm productivity.

Annual productivity changes tend to be much more extreme in agriculture

than in the rest of the economy. (See table 9.) During the past 5 years, the

changes have ranged from a gain of 9 percent in 1957-58, to a loss of 0.2 percent

in 1958-59, to gains of around 6 percent in the following 2 years, and finally to

one of 7.4 percent in 1962-63.

Because of these wide yearly fluctuations, modifications in the underlying trend

of farm productivity are not easily discernible. Nevertheless, there does seem

to have been some slowing down in the rate of productivity growth in agriculture.

During the last 6 years, the average annual rate of increase was 4.9 percent, compared with 5.7 percent over the postwar period 1947-63.

From the manpower viewpoint, however, the most important fact about farm

productivity is that it continues to rise much more rapidly than total farm output

From 1957 to 1963, agricultural production rose at an annual rate of only 1.3.

percent, little more than a fourth as fast as output per man-hour. In consequence, farm employment declined (by about 3.3 percent per year). Aggregate

farm man-hours went down slightly more (by about 3.4 percent per year), probably because of a decline in the workweek.

In the nonagricultural sector, productivity growth has moved in much the

same way as in the total private economy, of which this sector comprises such a

large part. The average annual increase in output per man-hour was high in

nonagricultural industries in the early postwar years, then slackened, and has risen again in recent years. For the entire postwar period 1947-63, the average

rate was 2.4 percent. From 1957 to 1963, productivity gains in this broad

economic sector averaged at least 2IA percent. (See table 10.)

TABLE 10.-Average annual percent change 1 in output 2 per man-hour and related

data, 1947-63

Item

Total private economy:

Output per man-hour 

Output 

Employment 

Man-hours 

Agriculture:

Output per man-hour 

Output 

Employment 

Man-hours 

Nonagricultural industries:

Output per man-hour 

Output 

Employment 

Man-hours

1947-63 1953-63 1957-63

3.0 2.8 3.1

3.4 3.0 3.5

.8 .6 .6

.4 .2 .4

5.7 5.0 4.9

1.4 1.0 1.3

-3.3 -2.9 -3.3

-4.1 -3.8 -3.4

2.4 2.4 2.8

3.6 3.1 3.6

1.4 1.0 1.0

1.1 .7 .8

1 Computed from the least squares trend of the logarithms of the index numbers.

Output refers to gross national product in constant dollars.

Within the nonagricultural economy, some industry groups have achieved

much more rapid gains in productivity than others (as shown in table 11). In

mining and in communication and public utilities, the rate of increase in output

per man-hour averaged more than 3.5 percent per year from 1947 to 1962. (Data

for 1963 are not yet available.) In transportation the annual productivity increase averaged between 2.5 and 3.5 percent over the postwar period as a whole,

but during the last 5 years, 1957-62, rose to more than 3.5 percent. All these

industry groups are notable for extensive and rapid technological advances.,-

See the 1963 "Manpower Report of the President," pp. 73-74.

9 The major technological developments in communication and transportation are discussed later in this

chapter. See also the 1963 "Manpower Report of the President," pp. 74-75.
NATION'S MANPOWER REVOLUTION 3481

TABLE 11.—Approximate percent change in output per man-hour, by industry,

1947-62 1

Industry

Average annual increase

Under 2.5

percent

2.5 to 3.5

percent

Over 3.5

percent

1947-62

Agriculture 

Mining 

Manufacturing 

Construction 

Trade 

Finance, insurance, and real estate 

Transportation X

Communication and public utilities X

Services X

1957-62

Agriculture 

Mining 

Manufacturing X

Construction 

Trade 

Finance, insurance, and real estate 

Transportation 

Communication and public utilities 

Services 

1 These estimates of output per man-hour are based in part on estimates of output (GNP) published by

the U.S. Department of Commerce in Survey of Current Business, September 1963. Exact averages are not

shown because the output figures vv ill be benchmarked next year to the 1958 input-output table and are,

therefore, still preliminary. 1963 data are not yet available for these industry groups.

The broad field of manufacturing ranks next in rate of gain in productivity,

with an average annual increase between 2.5 and 3.5 percent over the past 5

years and also the past 15 years. It should be emphasized, however, that this

moderate productivity record for manufacturing as a whole is the outcome of a

great diversity of technological developments and of economic and other factors

which have a differential effect on different industries. The statistical information so far available does not permit quantitative comparisions of the progress in

productivity and technology in the various major branches of manufacturing.

However, some industries—for example, the manufacture of synthetic fibers and

petroleum refining—are known to have been leaders in the introduction of new

technology and the achievement of increased output per man-hour, whereas in

some others—for example, apparel and shoe manufacturing—technological changes

have been limited in recent years.° Such gains in productivity as have been

made in these two industries during the postwar period have largely resulted

from better organization of production and other nontechnological factors.

The remaining industry divisions—construction; trade; finance, insurance, and

real estate; and service industries—have all made relatively small gains in productivity. For each of these industry groups, the average annual increase in

output per man-hour is estimated to have been less than 2.5 percent both during

the 5 years 1957-62, and over the entire 1947-62 period. It should be noted,

however, that these productivity estimates were obtained by output measures

consistent with the data on gross national product. For some sectors of the

private economy—particularly those producing services rather than goods, where

productivity gains are shown to be smallest—there are some questions about the

adequacy of the data to fully reflect real changes in output.

Automation and other recent technological innovations have made headway in

a few individual industries within these broad groups. The insurance industry,

for example, has been a pioneer in the application of electronic data processing

(EDP) to massive clerical operations, and more banks are now converting to

EDP systems. New materials-handling devices are also being widely installed

10 rl he regional conferences on industrial modernization, now being sponsored by the Department of

Commerce to stimulate growth in lagging industries, may have important manpower implications.

35-388 0-64--pt. 10 10
3482 NATION'S MANPOWER REVOLUTION

in warehousing operations in retail and wholesale trade and other industries."

But despite these and other examples of technological progress which could be

cited, it appears that technological advances have progressed relatively slowly in

these industry divisions.

It is noteworthy also that the industry divisions where productivity gains have

been slowest are those which expanded their employment over the 5 years 1957-62.

Thus, trade had an average annual rate of employment growth of 1.2 percent

from 1957 to 1962; finance, insurance, and real estate, 2.5 percent; services and

miscellaneous industries, 2.6 percent; and the contract construction industry

0.3 percent. Manufacturing, with an intermediate rate of increase in productivity had a slight downward trend in employment over the 1947-62 period.

And in the industry divisions with the most rapid productivity gains, employment

decreased more definitely—by 4.0 percent per year in mining, 1.3 percent in

transportation and public utilities, and over 3 percent in agricultane.

As productivity rises, a corresponding expansion of output is required to

maintain any given employment level. From 1957 to 1962, no industry division

with a productivity gain averaging as much as 2.5 percent per year achieved

enough increase in the demand for its products and services and hence in its

production to prevent a reduction in its work force.

Broad conclusions from this statistical finding would be unwarranted at this

point. In some years and some industries, production, employment, and productivity all move upward together. And within manufacturing, there is no

consistent relationship between employment trends and productivity changes.

The available evidence suggests, however, that in goods-producing industries and

others of a basically mechanical nature, technological change has tended to be

more rapid and extensive and to have a greater effect on productivity and employment than in most service industries, while the service-producing industries have

been the ones with the most rapid increase in real gross product in recent years.

CAPITAL SPENDING AND RESEARCH AND DEVELOPMENT

New investment and capital stock

The magnitude and nature of recent capital spending and of the country's

rapidly expanding research and development programs have influenced technological advances and the recent growth of productivity.

Expenditures for new plant and equipment mounted sharply in the United

States during the immediate postwar decade. A peak was reached in 1957, when

these expenditures totaled about $37 billion, compared with around $21 billion

in 1947.12 In the 2 years 1956 and 1957 alone, American manufacturers increased

their capacity by about 10 percent.

Capital spending then fell rather sharply, because so much of the capital stock

had been newly added or updated, and did not reach the 1957 figure again until

1962. In 1963 a new record of close to $39 billion was set. And the surveys of

business plans for 1964 indicate that capital expenditures will be even higher this

year than last.

The trends in capital spending between 1957 and 1962 explain the very moderate

increase in capital stock per employed person achieved in these years. (See

table 12.12 The stock of capital equipment, the segment of capital stock most

closely related to output per worker, rose at an annual average rate of only 1.3

percent from 1957 to 1962, not quite one-fourth the rate (5.4 percent) recorded

for 1947-57, but the rate of increase in investment in plant per worker was only

about 1 percent per year in both periods.

TABLE 12.—Percent increase 1 in stock of fixed capital per employed person, 1947-62

Period

Percent increase in value

(constant dollars)

Total Plant Equipment

1947-62 2.6 1.3 4.4

1947-57 2.8 1.0 5.4

1957-62 1. 1 1.0 1.3

I Computed by least squares method.

Source: U.S. Department of Commerce and U.S. Department of Labor.

II See p. 58.

12 Figures on investment and capital stock in this section are in current prices and, except where otherwise

indicated, are based on data from the Department of Commerce.
NATION'S MANPOWER REVOLUTION 3483

These overall figures give only a very partial indication, however, of the magnitude of the technological changes affecting workers. Between 1957 and 1962,

the bulk of investment was devoted to modernization and replacement. This

was true also in 1963 when roughly two-thirds of all capital spending by manufacturers went for replacement and modernization, with only one-third allocated

to expansion of facilities.13

Expenditures for automated equipment have increased impressively. The

proportion of manufacturers' capital spending allocated to automated machinery

and equipment rose from roughly 11 to 12 percent in 1955 and 12 percent in

1959 to around 18 percent in 1962, according to a survey by the McGraw-Hill

Co. in the fall of the latter year. Manufacturers also reported plans to devote

a slightly higher proportion of their capital outlay to such equipment in 1963. The

proportion of capital expenditures going for automated equipment was found

to have risen significantly between 1955 and 1962 in all major branches of manufacturing except two—those in which the proportion was highest at the beginning

of the period. The rubber industry devoted about one-fifth of its capital outlay

to automation in each of the years for which figures were obtained. And in

the motor vehicle industry, which was an early leader in automation, expendi -

tures for this period dropped from about one-fourth of capital spending in 1955

to around one-fifth in 1962.

Although the proportion of capital expenditures devoted to automated equip -

ment may not continue rising in the next few years, outlays for such equipment,

as well as other technological improvements, will undoubtedly remain high.

In fact, they may well increase further, in absolute if not relative terms, in view

of the overall expansion in capital investment which is planned and the availability of many types of new equipment which offer the possibility of improved

operations or products or cost savings.

Research and development

The sharp and persistent uptrend in the national expenditure for scientific and

engineering research and development (R. & D.) also points toward continuing

advances in technology and productivity. Measured in terms of current dollars

the volume of research and development performed by private industry, the

Federal Government, colleges and universIties, and other institutions nearly

tripled between 1953-54 and 1961-62, rising from slightly over $5 billion to nearly

$15 billion. The National Science Foundation estimates that the cumulative

outlay for research and development amounted to about $100 billion over the

1953-63 decade, and that it may double during the coming decade.

The number of scientists and engineers engaged in R. & D. work nearly doubled

in the past decade and now stands at more than 450,000. Although private

industry conducts about three-fourths of all R. & D. work performed in the

country—the remainder being divided nearly equally between the Federal Government and all nonprofit organizations—it supports only one-third of the total

expenditures on research and development.

In view of the great expansion in R. & D. activities, it may seem surprising

that productivity and technological change have not proceeded at an even faster

pace than is implied by the statistical measures available. It should be noted,

however, that approximately two-thirds of all research performed in the country

is financed by the Federal Government, and that the great bulk of this Government-sponsored research is directed to the needs of defense and space programs.

Although Government-sponsored military and space research have made some

contributions to our civilian economy, the timing and extent of their effects cannot be predicted with any degree of precision, depending primarily on the success

of current programs to adapt advanced military technology to civilian uses."

Furthermore, much of the R. & D. work controlled and financed by industry itself

is aimed at developing new or improved products, rather than improved processes.

A survey by the McGraw-Hill Co. in 1962 shows that 47 percent of the reporting

companies planned to concentrate R. & D. money on new-product research, 40

percent on improvement of present products, and only 13 percent on new-process

research—the phase of research and development likely to have the greatest effect

in increasing productivity.

New products have had, however, a significant effect on the growth of the

economy. Many products now in demand did not exist 10 years ago. These

13 "Preliminary Plans for Capital Spending in 1964-65," McGraw-Hill survey, October 1963.

14 Some examples of contributions made to the civilian economy as a result of Government-sponsored

research include wash-and-wear fabrics, mass production of penicillin, neon lights, the first successful electronic computer, and concentrated orange juice.
3484 NATION'S MANPOWER REVOLUTION

changes in demand are affecting the nature and distribution of employment—

creating or expanding some industries, leading to declines in others. The extent

of the occupational and geographic shifts in employment which can result is

exemplified by the growth of the petroleum industry and the related decline in

coal mining, and by the effect of the development of synthetic fibers in decreasing

employment in cotton and woolen textiles.

The accelerated R. & D. expenditures made during World War II probably

gave rise to a higher rate of productivity in the postwar period. But the greatest

impact of our expanding R. & D. programs on productivity and civilian technology is possibly still to come. A stockpile of scientific knowledge and technical

developments has certainly accumulated. The rate at which the most radical

innovations will be introduced will depend, however, not only on the technological

possibilities but also on many economic and social factors, including comparative

costs, market prospects, and the availability of workers with the required technical

backgrounds.

MAJOR TECHNOLOGICAL TRENDS

Automation and other technological changes currently underway in the United

States involve a great number and variety of innovations affecting many industries and occupations. The following brief review of major technological trends

is designed to indicate the nature of these trends and the fields of work chiefly

affected by them, and also to suggest their diverse and sometimes offsetting

consequences for employment and occupations.

Conclusions as to the extent and rate of diffusion of these changes have been

possible in only a few cases. The reader should also bear in mind that, manifold

as the changes are, there are broad areas of the economy—especially in the

service-producing industries—which are at present only minimally affected.

Four of the broad technological trends or groupings of innovations here discussed—electronic data processing, instrumentation and control, numerical

control, and advances in communication—are sometimes considered, in whole

or in part, under the general heading of advances in information-handling technology. A second set of trends—improvements in machinery, mechanization of

materials handling, developments in metal processing, and innovations in transportation and in power generation—continue the long-term trend toward substitution of physical energy for human labor in industrial activities. Finally,

new materials and products are continuing to have an important economic and

social impact on many industries.15

While each of these trends will be discussed separately, they have many important interrelationships. There is now a tendency to develop more and more

combinations of innovations, which may have very far-reaching effects. An

illustration is the prospective integration of advanced developments in three

major fields—long-distance transmission of data, electronic computers, and

materials-handling equipment. Through this linking of devices into one coordinated system, processing of customer orders, inventory control, and warehouse

shipping will all be handled automatically. Orders will be transmitted directly to

a computer which processes the inventory records and then signals the automatic

materials-handling system in the appropriate warehouse to start moving the

needed goods. Each of the three types of developments, used by itself, can have

major economic and manpower effects. But when combined, their total impact

on business organization, location of facilities, and manpower requirements will

be expanded significantly.

Electronic computers

Electronic computers are unquestionably one of the most important innovations

of the post-World War II period. With calculating speeds measured in millionths of a second, a vast capacity to store and retrieve information, and the

ability to perform long series of instructions without human intervention, the

computer is a highly versatile machine which is being applied to a constantly

increasing variety of business, industrial, and scientific activities.

The computer was first introduced commercially in 1951. By mid-1963 the

total number of general-purpose digital computer systems installed, according to

one unofficial estimate, was about 12,000 and additional thousands were on order.

Is As part of its research program on productivity and technological developments, the Bureau of Labor

Statistics is preparing a report describing significant technological trends in 36 major industries, covering

over one-half of nonfarm employment. The report is based on a summary review of trade and technical

publications, annual corporate reports, Government studies, and some consultation with industry experts.

Industry descriptions were reviewed by experts in each industry. The material in this section was derived,

in part, from this report. For a brief discussion of technological developments in agriculture, which are

not covered in this section, see the 1963 "Manpower Report of the President," pp. 73-74.
NATION'S MANPOWER REVOLUTION 3485

Undetermined, though smaller numbers, or special-purpose computers were also

in use and on order. Annual sales value of electronic data processing machines

and associated equipment estimated at about $750 million in 1963, was about 16

times the 1955 figure and more than double the 1959 amount.

Improved models of computers are constantly being developed. In addition,

their speed, versatility, and automaticity are being increased by advances in

programing languages and in peripheral equipment, such as data communications

devices, optical character recognition machines, and high speed printers.

Computers are now being used in all the major branches of manufacturing;

many nonmanufacturing industries; and Federal, State, and local governments.

There is, however, a heavy concentration of computers in a few major industries

and in government agencies, chiefly Federal. As of late 1962 nearly half of all

computers were being utilized by organizations in the following five categories:

Government, transportation equipment manufacturing, electrical equipment

manufacturing, insurance, and finance.16

A variety of economic, technological, and institutional factors underlie the

present leadership of these industry groups in number of computers. In Government agencies, computers were introduced for scientific applications and for

processing census data early in the last decade, and since the late 1950's have also

been more and more widely used for many types of administrative and program

operations. The insurance and finance industries are characterized by largevolume, routine paper-processing operations—a type of application well suited to

processing by computer. In the electrical and transportation equipment manufacturing industries, the utilization of computers ranges from accounting to production control to scientific and engineering computations associated with the

industries' extensive R. & D. programs. The extremely large companies in these

manufacturing industries have had the necessary risk capital and technical knowledge to introduce computers early and are now extensive users of this equipment.

In a field influenced by so many uncertain factors, projections of future trends

are inevitably shaky. There is general agreement, however, that use of computers will continue to grow rapidly.

Quantitative illustrations of the anticipated growth can be given for two fields.

In the Federal Government, about 2,100 electronic computers are expected to be

installed by June 30, 1966, as compared with 1,248 on June 30, 1963. (See chart

13.) And a survey of commercial banks made in March 1962 indicated that the

number of such banks with computers would more than double within the next

3 years. (See table 13.)

chart 13 GROWTH IN NUMBER OF ELECTRONIC

COMPUTERS IN THE FEDERAL GOVERNMENT

vraetwa;;I:

St

.114t4 'S 6 5 93 59 69 61 62 63 64 65 1966

OF#SAL YEAli EST 001

16 These estimated are based on a special report prepared by the Diebold Group, Inc., for the U.S. Department of Labor, Office of Manpower, Automation, and Training.
3486 NATION'S MANPOWER REVOLUTION

TABLE 13.—Commercial banks with computer systems in operation or planned,'

March 1962

Use of computers in banks Number Percent

Total number of banks surveyed 972 100.0

Banks reporting or planning computer systems 382 39.3 In operation 116 11.9 In process 2 62 6.4 Planned 200 20. 6

Unspecified 4 .4 Banks without computers or plans for them 590 60. 7

1 Covers commercial banks with total deposits of $25,000,000 or more.

2 Includes banks in which computers are being installed and banks in the process of converting from one computer to another.

3 Includes banks with computers on order and banks with definite plans to begin using computer systems within 3 years.

Source: Federal Reserve System.

Electronic data processing (EDP) has both employment-reducing and em- ployment-generating effects. In business data processing, labor savings are chiefly in routine clerical work such as calculating, posting, filing and main- ing records, and in some office machine jobs such as tabulating and bookkeep- ing.17 Computers also tend to reduce employment in certain types of factory jobs as a result of tighter production standards and inventory control. Requirements for lower and middle management employees may also be affected, because of centralization and coordination of decisionmaking and other organizational

changes.

On the other hand, thousands of jobs have been created in new EDP occupa- tions—e.g., those of programer, systems analyst, console operator, and tape librarian. Plants making computers have also expanded their employment. The availability of information-processing systems has caused many firms to introduce expanded reporting and control systems—leading, in some cases, to an increase in clerical employment. Numerous service centers, consultants, and other business services connected with the use of computers have come into being.

By facilitating research and development, computers are contributing to a

flow of new products and even to the creation of new industries. Perhaps the

most notable example is the aerospace industry, which uses computers intensively in the design and testing of new aircraft and space vehicles.

What the net effect of electronic data processing on employment is or will be

on balance, cannot yet be determined. But one conclusion is already certain: major changes in occupational and industrial employment patterns are inevi- table—with resulting needs for training in new and expanding fields of work and possible serious adjustment problems for large numbers of workers.

Instrumentation and automatic controls

The use of instruments of increasing complexity for measurement, sensing, data acquisition, and control is another rapidly developing area of technology. Sales

of scientific and industrial instruments have been increasing by about 9 percent

per year over the past decade, and were expected to total more than $5 billion

in 1963.

Improvements in instrumentation—fostered by the space program and by other

research in electronics, metallurgy, optics, and nuclear engineering, as well as

by the large R. & D. programs of the instrument manufacturers—contribute to

technological progress in many manufacturing, transportation, and other in- dustries.

Systems of recording and control istruments have become a basic part of .the design of plants where gases, fluids, and other chemicals are processed. Instruments not only measure and record such factors as pressure, temperature, humidity, and flow but also activate servomechanisms, which open and close valves and

operate pumps under rigidly controlled conditions. A feature of some new processing plants is remote control of operations through centralization of instrument

readings and manual controls.

17 For studies on the impact of electronic data processing, see the Bureau of Labor Statistics reports: "Adjustments to the Introduction of Office Automation" (Bulletin No. 1276, 1960) and "Impact of Office Automation in the Internal Revenue Service" (Bulletin No. 1364, 1963).
NATION'S MANPOWER REVOLUTION 3487

Computers are being applied to process control so that complex computations

based on the vast quantities of data supplied by the instruments can be made

rapidly and accurately and the results fed back to guide the control instruments.

It was estimated in early 1963 that about 237 plants in the United States—including petroleum refineries and electric power, chemical, steel, food, and cement

plants—had already connected process control instruments to digital computers

or were scheduled to do so.18 While this advanced type of automation is still in

an early stage of development, it has thus had considerable recent growth.

The progress of instrumentation and automatic control in industry affects in

several ways the numbers and types of workers employed. The design and construction of complex instruments and related apparatus requires thousands of

scientists, technicians, and production workers. Employment in the instrument

and related products industry totaled 371,400 in 1963, slightly over 2 percent of

manufacturing employment, but about 49 percent more than in 1950 (whereas in

manufacturing as a whole, employment increased by only about 11 percent over

this period).

The introduction of advanced instruments and computers for process control

generally results in labor savings, by increasing production capacity significantly

without a proportionate increase in the number of workers needed. The nature

of the jobs held by operating, maintenance, and technical and supervisory workers

is also likely to be affected. To handle the advanced control systems, some

employees need long periods of training, which may involve courses given by

equipment manufacturers as well as training on the job, though some maintenance

can be done with little training. Large proportions of the employees in plants

with such advanced systems are engaged in maintenance and repair of equipment,

including the complex instrumentation, or in professional or other nonproduction

jobs. In the petroleum refining industry, for example, which was a pioneer in

the introduction of control instrumentation, the proportion of workers in nonproduction jobs has risen rapidly—from 23 to 37 percent between 1947 and 1962.

Numerical control

In the metalworking industries, more automatic production is being achieved

through numerical control—a technique used to operate machine tools and certain other types of equipment by means of numerically coded information recorded

in advance on punched cards, magnetic tape, or punched paper tape. Fed into a

system of electronic interpreting devices, the information from the tape or cards

can, with little human assistance, control a machine tool as it goes through a

sequence of cutting operations. Once developed, the coded information—which

is sometimes prepared with the help of a computer—can be stored for future use

or used on another machine elsewhere to produce an identical part.

First commercially used in 1957, numerical control is still in an early stage of

development and use. About 3,000 numerically controlled machine tools were

estimated to have been installed by early 1963, but these represented only a tiny

proportion of the total of about 2 million machine tools then in place.19 Threefourths of the new tools were in the aerospace and machine-tool producing industries, but there are at least a few in almost every maior metalworking industry.

Some experts believe that within 5 or 6 years numerically controlled machine tools

may represent 30 to 50 percent of all machine tools purchased.

One outstanding advantage of numerically controlled devices is their flexibility

and applicability to small orders, which form a large proportion of total machineshop work. In this respect, numerical control contrasts sharply with earlier

types of automation in metalworking industries, which were devised for mass

production. It thus has the effect of greatly extending the areas of metal-working

susceptible to automation.

Already, numerical control is being applied to many types of operations in addition to metal-cutting machine tools. A beginning has been made in its application to wire winding, welding, drafting, and inspection, and its use is expected

to be extended rapidly in these and other areas.

Where numericallycontrolled devices are installed, they can result in substantial

labor savings in machining operations, the amount varying over a wide range with

the design of the part, the quantity required, and the methods previously used.

However, a new job category, that of parts programer, has to be added to work

Is "Digital Computer Control List Lengthens, Market Matures" Control Engineering, vol. X, September

1963, pp. 73-83.

" "Numerical Control Shows Record Growth," American Machinist—Metal-Working Manufacturing,

vol. 107, No. 15, July 22,1963, pp. 71-76. This estimate was based on a survey of industries using these tools,

and is somewhat higher than the number estimated by the Department of Commerce, which is based on

the number shipped between 1954 and June 30, 1962.
3488 NATION'S MANPOWER REVOLUTION

out the coded instructions which are punched into the control tape or cards. Maintenance work is also increased, since the electronic circuitry, as well as the tool's mechanical structure, must now be serviced.

Advances in communication technology

In the field of communication technology, far-reaching achievements are greatly enlarging man's ability to overcome barriers of distance and time in trans- mitting and receiving information. The most spectacular is perhaps the com- munications satellite which, according to David Sarnoff, opens the way technically

"for the establishment over the next few decades of a communication system by which governments, organizations, or individuals may establish contact with

anyone, anywhere, at any time, by voice, sight, or document, separately or in combination."

Impressive improvements are also taking place in the scope, efficiency, and

speed of existing communication systems. Expenditures on new plant and equipment in the communications industries amounted to about $3.6 billion in

1962, in 1962, an increase of 13 percent over 1961.

The telephone industry continues to make changes leading to more automatic

operations as well as extended service. Approximately 50 percent of all longdistance calls in the Bell System are now customer dialed, and the figure is expected to reach 70 percent by 1970. Electronic switching will facilitate a wide variety of service changes. Data transmission, a rapidly expanding service, is

expected to become an important adjunct of electronic data processing and other

data processing activities in many industries, facilitating rapid distribution and utilization of data and centralized control of operations.

In television broadcasting, the impending opening of the ultrahigh frequency

range to commercial use could make the establishment of many new stations commercially feasible. Other industries and sectors of the economy are making increased use of closed-circuit TV systems, for such purposes as monitoring hazardous

industrial operations from a distance, facilitating business conferences without

the physical presence of the participants, providing drive-in teller service in banks,

and bringing outstanding educators to many different classrooms at the same time.

The new techniques of communication create opportunities to do things never

before feasible, opening up areas for new investment and for employment growth, especially for engineers and other highly trained personnel involved in the

design, manufacture, and utilization of electronic equipment. At the same time,

greater automation of operations is tending to restrict employment per unit of

output in many types of work. In the past, technological advances in this industry primarily affected operating employees, but a variety of new developments may also affect maintenance and installation workers. Through their

cost-reducing effects, the innovations may also make possible price reductions

which will tend to generate increased demand and thus have an expansive effect

on employment.

Improvements in machinery

Extension of mechanization continues to be an important factor in increasing

productivity in many industries. New models of automatic machinery—for

presswork, bottling, packaging, and so forth—are constantly being introduced.

The basic principles are usually unchanged, but through such advances as more

powerful motors, heavier frames, simpler controls. and variable motor speeds the

amount of labor required per unit of output is greatly reduced.

An important direction in machinery design is toward the integration of a number of hitherto separate steps into one large machine which carries through the

series of operations with a minimum of intervention on the part of the machine

tender. Thus, many automatic transfer lines have been built which integrate

materials-handling equipment with a series of machine tools. Such transfer

lines are used not only in the automobile industry but also in the mass production

of a variety of other products, including electrical appliances, farm equipment,

and office machinery.

Mechanization is also being extended to tasks still done largely by hand. The

harvesting of fruit and vegetable crops, for example, may undergo revolutionary

changes with the wide adoption of specialized labor-saving equipment. Machines

for assembly work, one of the most difficult factory operations to mechanize, have

been introduced by some large companies in the fabricated metal products,

electrical and nonelectrical machinery, and transportation equipment industries.

Such improvements in machinery are designed to be cost saving, generally

through a reduction in labor requirements per unit of output. If these cost

savings are passed on to users, the effect may be an increase in demand. De-
NATION'S MANPOWER REVOLUTION 3489

pending on the consequent trend of output in the factory installing the new

machines, they may lead to increased employment, worker displacement, or

merely to changes in duties for the operatives affected. As a rule, requirements

for skilled maintenance workers are increased to prevent costly downtime and

speed repairs of the complex automatic machinery.

Mechanization of materials handling

The movement of materials, from the receipt of raw materials to the shipping

of final products from the plant, is also being mechanized increasingly. Sales of

materials-handling equipment are expected to amount to $1.4 billion in 1963,

about 20 percent more than in 1961.

More powerful and maneuverable models of forklift trucks, hoists, cranes,

conveyors, and tractors are being introduced in many industries, including

construction, pulp and paper manufacturing, meatpacking, and foundries.20 An

innovation of growing importance in the handling of bulk materials is the use of

pneumatic conveyors for moving granular materials by air pressure; this innovation has applicability to a variety of industries, including bakeries, cement, flour,

fertilizer, and soap manufacturing, and longshoring. Through the combination

of electronic devices with unmanned trucks or conveyors, warehousing operations

are being mechanized—and in some cases highly automated—in large retail and

wholesale companies, airfreight terminals, and other types of business organizations.

Substantial labor savings, primarily affecting unskilled labor, are made through

the use of materials-handling equipment. If demand does not increase greatly,

laboring jobs are replaced by relatively smaller numbers of operative positions,

which may involve either operation or monitoring of the equipment, depending on

the degree of automation. Since continuous operation of mechanized equipment

is economically essential, requirements for skilled maintenance workers are once

again increased.

New developments in metal processing

In the production of primary metals, cost-saving technological changes are now

being stimulated by competition from foreign metal producers, and also from

plastics and other materials which are being developed as possible substitutes for

metals in more and more uses. The iron and steel and nonferrous metals industries have therefore expanded both their R. & D. programs and their capital

investment in modernization of plant and equipment.

In blast furnaces, productivity is being increased by the use of beneficiated ore

and by various improved practices. In steelmaking, a highly important development is the basic oxygen process, which produces steel six or more times faster

than the open-hearth process. Oxygen injection is also being introduced into

open-hearth furnaces, thus increasing their capacity at a fraction of the cost of

constructing new furnaces. Table 14 shows the sharp rise in consumption of

oxygen in iron and steelmaking. This increase is expected to continue, though

possibly at a diminishing rate.

TABLE 14.—Consumption of oxygen in the iron and steel industry, 1958-62

Year

Millions of cubic feet in

gaseous form

1958 

1959 

1960 

1961 

1962 

Blast

furnaces

Steelmaking

+5,876 13, 049

4,484 18, 307

4,362 29, 219

8,894 44,170

11,411 54,675

Source: Annual Statistical Report, American Iron and Steel Institute, 1962.

Continuous casting is another potentially important development in the s tee

industry. Although this process has so far gained only limited acceptance by

some big companies, it can make possible lower capital and operating costs than

20 For a study on the impact of materials-handling innovations, see the Bureau of Labor Statistics report,

"Impact of Technological Change and Automation in the Pulp and Paper Industry" (Bulletin No. 1347,

1962).
3490 NATION'S MANPOWER REVOLUTION

are required in conventional rolling-mill operations. In addition, increased

instrumentation is being used to speed output and achieve greater precision and

uniformity of product. All these technological advances are taking us close to the

goal of complete automation of all iron- and steel-making processes.

The new metal-processing techniques generally have the effect of lowering both

capital and labor requirements. As they come into increasing use, the demand for

skilled maintenance workers may rise, although employment in the less skilled

operative and laboring jobs, including materials handling, is likely to decrease.

However, because continuous processing will undoubtedly reduce the marginal

costs of production, it may stimulate the search for new markets and the expansion

of established ones, thereby benefiting labor by reducing the frequency and

duration of layoffs.

Technological advances in transportation

Under the spur of interindustry competition, the transportation industries are

introducing a variety of cost-cutting innovations and service improvements.

Rail, air, water, trucking, and pipeline industries are all undergoing substantial

modernization.

In the railroad industry, new diesel-electric locomotives haul longer trains, at

higher speeds and with greater loads, and have lower fuel and maintenance costs.

Improvements in rolling stock are increasing the average capacity of box and tank

cars. A recent development, the unitized coal train, competes successfully with a

coal slurry pipeline. Centralized traffic control, electronic classification yards,

improved signaling and communication systems all speed rail movement and

afford more efficient use of facilities. And piggyback service, which combines the

hauling capacity of the railroads with the flexibility of trucks, is growing rapidly.

In air transportation the conversion to jet aircraft is continuing. By 1970

practically all aircraft of scheduled airlines will be medium- and large-sized jets.

Airports and terminals are also being modernized, and automation of air traffic

control, baggage handling, ticketing and paperwork is increasing. Supersonic

transports, with speeds of 1,500 to 2,000 miles per hour, are under intensive

development.

In the trucking industry, engine improvements such as supercharged diesel

and gasoline engines of 500 to 600 horsepower are imminent. The use of lighter

weight metals and improved design in the construction of trucks could increase

their capacity within legal weight limitations. In addition, highway improvements could permit larger and heavier trucks and higher average speeds, and

reduce traffic delays.

In water transportation the need for cost reduction to meet foreign competition

creates pressure for automation and other technological improvements. A

tanker with a 20,000-horsepower turboelectric engine controlled from the bridge

is an example of an automated ship already in operation. Diesel propulsion,

extensively used on foreign ships, has resulted in large fuel savings. Nuclear

propulsion holds promise of further, cost savings because its use eliminates bulky

fuel and thus saves space for ca*o. In addition, container ships are being

developed which may substantially reduce loading costs and turnaround time.

Labor savings may be expected to result from the larger vehicle sizes and

faster speeds anticipated in all forms of transportation. Additional labor savings

could occur in freight handling, from growing use of containers and piggyback

services; in maintenance, from mechanization and more reliable equipment; and

in the business aspects of transportation, through greater use of computers and

related devices.

Because of the possibility of worker displacement in the older transportation

industries, especially the railroads, the retraining of operatives and maintenance

workers is likely to be a matter of major importance. On the other hand, employment in air transportation and trucking will probably continue to grow, despite the anticipated technological advances and consequent increases in output

per man-hour.

Technological advances in power production

Technical advances in the production and use of power, now underway or

under development, can have a marked impact on the growth of the entire industrial system.

As the electric power industry expands to meet the rising demand for its output,

it is increasing the capacity of the new generators installed and is introducing

high degrees of automation in its generating and power distribution operations.

Another important development is the trend toward coordination and interchange of electric power on a regional basis—a development expected to bring
NATION'S MANPOWER REVOLUTION 3491

about a substantial reduction in plant capacity requirements. Finally, the

industry is emphasizing the development of extra-high voltage transmission. The

transmission of large quantities of power over long distances—in some cases, from

generating plants located at the mine head—could replace the shipment of coal

to local utilities by rail and is frequently referred to as "coal by wire."

Developments affecting the sources of electric power are also in progress.

Nuclear generators are expected to assume increasing economic importance in the

late 1960's and thereafter, and a number of other possible sources of power are

being investigated and tested. Magnetohydrodynamic (MHD) power—a method

of generating electric power by passing extremely hot gases through a magnetic

field—would eliminate the conventional, large, and costly turbogenerators. This

innovation is still in an early stage of research. Work is in progress also on

methods of producing electric power from chemical energy, radiation, heat, and

sunlight. Because generators using these methods would be small and light in

weight, consideration is being given to their possible use in remote areas, as well

as in automobiles, trucks, and ships.

Major changes in methods of power production are expected to be introduced

gradually, as such changes have been in the past. Cheaper, more accessible power

could speed the progress of mechanization, and could also expand or reduce output

for manufacturers of the various types of power equipment—with effects on employment in many fields of work. However, the growth of efficiency and output

in the electric power industry in the postwar years has been accompanied by

employment expansion, but at a much slower rate.

New materials and products

The development of new products and materials is an important and continuous

feature of the country's technological progress. Some of these satisfy unmet

needs or even generate new needs, thus expanding demand and employment.

Others are essentially substitutes for existing products and so may adversely

affect long-established firms and industries while helping others to grow.

The development of synthetic materials is one of the most significant achievements of chemical technology. From research laboratories have come a wide

variety of manmade materials that compete with wood, steel, glass, paper, and

leather, as well as cotton and wool. One of the newest synthetics, about to come

into production, is a leatherlike material which could have a major effect on the

leather, footwear, and meatpacking industries. Because of its uniform qualities,

it could also facilitate the introduction of automated shoe machinery.

Another new plastic material—acetals—has the hardness, density, and strength

of some metals. It can be machined and may replace metal components in many,

appliances and in automobile instrument panels. Plastic pipe is being used in

some construction projects, and a substantial growth in the use of plastic materials

for other construction purposes is foreseen by some experts. Reinforced plastics

have been steadily replacing wood in small boats and other uses. And the flow

of newly developed synthetics continues, sharpening competition with other

synthetics as well as with natural materials.

Another important trend, stimulated by the competition from new materials,

is toward improvements in older materials and the discovery of new uses for

them. Thus, in recent years, aluminum cans are finding increasing uses because

of their light weight and rust-free characteristics. The steel industry has fought

back with "thin tin" for cans, much lighter and cheaper than standard tinplate.

Other improvements in conventional materials include new glass ceramics,

extremely hard and resistant to friction and high temperatures, for use in space

technology; new finishes for fabrics to make them waterproof, oilproof, stainproof, and fireproof; and "engineered lumber" designed to meet specifications to

widen the market and effect economies in construction.

The creation of new final products and components for them is an important

objective of research and development in many industries. How far reaching

the effects of a new product may be is illustrated by the transistor which, since

its invention in 1948, has cut deeply into the market for vacuum tubes. In a

recent period of only 4 years, 1958-62, production of transistors increased fivefold. Many new consumer products exploiting transistors are in development

(e.g., electronic ovens, controls for locking windows and doors, and teaching

mac hines) .

The development of new materials and products can and does create new jobs.

Employment in the production of semiconductors, for example, was estimated

by the Department of Commerce at about 57,000 in 1962—more than double the

number in 1958. The electronics industry has been a growth industry in recent
3492 NATION'S MANPOWER REVOLUTION

years; its estimated employment increased by over 200,000, or more than one-third, between 1958 and 1962.

Where new or changed products take the place of older ones, the creation of new jobs may be at least partly offset by elimination of work connected with the replaced products. On balance, however, product innovation is probably a

strong influence in the direction of employment growth, though also causing industrial and occupational shifts in employment requirements and consequent displacement and readjustment problems for many workers.

SOME MANPOWER IMPLICATIONS OF TECHNOLOGICAL CHANGE

The rapid pace and pervasiveness of technological change in American industry

are apparent from this brief review of major trends. The technological revolu- tion continues to affect all segments of the economy, but some much more than others.

The factors which will stimulate or impede the extension of automation and other new developments, and the probable manpower consequences of these de- velopments, are now being studied by the Department of Labor and many re- search organizations. At this point, conclusions as to the net effect of current, technological trends on employment levels would be speculation. It is obvious, however, that important shifts in manpower requirements are in process, with forced readjustments for large numbers of workers and serious implications for the education and training both of the present work force and of young people still in school.

Occupational effects of several broad types can be discerned. These are briefly outlined below. It must be emphasized, however, that the conclusions indicated

are provisional, subject to amplification and verification by further research.

Occupational changes

One of the most evident occupational effects of current technological changes is their impact on unskilled and semiskilled jobs. The increasing mechanization of materials handling has eliminated much manual labor in the lifting movement, and loading of goods. Factory jobs involving direct step-by-step manipulation of equipment or materials or manual tending of machinery are also becoming relatively fewer, because of the introduction of automatic machinery.

In some instances, the level of skill required to operate new machinery is no higher than that for the old operation. This is true, for example of the men who feed, watch the operations of, and remove completed products from new automatic threading machines in a nut and bolt factory; and of those performing parallel functions on an automated line for the production of resistors in a new electronics plant. Occasionally the new job requires only that the person watch

a light panel and push a button on signal.

But situations of this type do not negate the general finding that current technology is tending to restrict employment in jobs with low skill demands. While semiskilled operators are required for an automatic machine, they are likely to be few in number—far fewer than the operatives replaced by the machine. And in highly automated systems, where feeding of the machine and removal of products from it are handled mechanically, the manual aspects of operators' work

may be eliminated altogether. On the other hand, a continued rise in the general level of income may mean more jobs for parking lot attendants, gardeners, hedgemen, and home repair mechanics, all of whom are relatively unskilled.

For production workers, the typical job of the future will probably be that of machine monitor. A good many operators of highly automated equipment al- ready have this function. They may have responsibility for supervising com- plexes of automatic equipment (sometimes a battery of machines), for controlling

an integrated system of conveyors and processing machines from a remote station,

or for monitoring an elaborate instrument control panel and recording information

for interpretation. More and more, the operator is becoming a skilled watchman, with functions demanding patience, alertness to malfunctioning, a sense of re- sponsibility for costly equipment, and a better educational background than was needed in the past by factory operatives.

Maintenance and repair workers qualified to service and repair electronic equip- ment, instruments, and automated machinery have a growing field of employment. Plants that automate attempt to keep this costly equipment operating as nearly continuously as possible, thereby providing more employment for maintenance workers in most of the major areas of technological change discussed earlier in this chapter.
NATION'S MANPOWER REVOLUTION 3493

More and better training is required for the maintenance positions in enterprises

adopting this new, complex equipment—especially because of the combination of

electronic, electromechanical, and sometimes even hydraulic operations involved

in the machine-and-control systems. Thus, many instrument repairment and

business-machine servicemen need post-high-school education in engineering

fundamentals, mechanics, or electronics, as well as intensive occupational training, to service the complex instruments and office machines coming into use.

Maintenance electricians and appliance servicemen will need more technical

education in order to handle a growing number and variety of electronic devices.

Similarly, in some other skilled trades—including those of machinist, tool and

diemaker, electroplater, and plumber and pipefitter—technological advances are

introducing new technical requirements.

Among office workers, electronic data processing is eliminating many routine

jobs and reducing the repetitive aspects of other jobs. Electronic data processing

is having its greatest effects on detailed, repetitive manual work in functions such

as accounting, addressing, billing, inventory control, payrolls, and other recordkeeping. Many clerical occupations—especially those of a service character,

such as bank teller, complaint clerk, receptionist, and secretary—continue unaffected by automation.

Most of the new EDP jobs, on the other hand, are at a higher level. Those of

the programer and systems analyst are in the professional category, while most of

the console and peripheral equipment operators are in the upper level of clerical

work. Thus, considering both the jobs eliminated and those created, the net

result of a changeover to electronic data processing is likely to be a somewhat

higher average level for employees in the offices affected. There is evidence

also that electronic data processing, in eliminating many of the routine elements

of office jobs, enlarges employees' personal responsibility, requires greater accuracy in office work, and imposes the necessity for workers to meet more precise

deadlines. Under some circumstances, the conditions of work for clerical employees under electronic data processing may become more similar to those of

factory workers.

The evidence is still far from conclusive regarding the general effects of automation on managerial personnel. In some instances, however, the introduction

of electronic data processing and the accompanying reorganization of managerial

functions have led to reduced staffs in the lower and middle echelons of management.

In scientific and engineering professions, a notable effect of recent scientific

and technological advances has been the creation of new specialties. Such fields

as cryogenics, bionics, ultrasonics, computer technology, and microelectronics

were little known a decade ago. The development of computers has also been

one of the main factors in the great postwar expansion in the mathematics profession and has had a revolutionary effect in many other scientific and engineering fields. Interdisciplinary training of engineers and other professional workers

and revision of engineering curriculums are proposed to meet industry's emerging needs.

Needed directions of action

The President's Advisory Committee on Labor-Management Policy, in its

report on automation issued 2 years ago, outlined the many directions of action

required to achieve maximum technological progress with minimum disadvantage

to individuals. It recommended, among other measures, policies to promote a

high rate of economic growth and full utilization of resources, collection and dissemination of information on changing -job requirements, acceptance by management of responsibility for taking steps to lessen the impact of technological

change on workers, retraining of displaced and potentially displaced workers

through both government and private action, and a variety of other steps to

protect and aid those displaced."

This Committee, in response to a request from the President in early 1964, has

undertaken a further study of the impact of automation and of what can be done

to deal with the problems created. The Department of Labor is cooperating

in this study. It is anticipated that it will provide new guidelines for policy

and action.

In its program with respect to the manpower aspects of automation, the Department of Labor is following several maior pathways—all related to the recommendations of the President's Committee in its 1962 report. Continuing research

is in progress with respect to the current and prospective impact of technological

21 "The Benefits and Problems Incident to Automation and Other Technological Advances," report

from the President's Advisory Committee on Labor-Management Policy, January 1962.
3494 NATION'S MANPOWER REVOLUTION

advances on manpower requirements in different industries and occupations. Studies are also being made of the measures which have been used by employers and others in adiusting to technological change, of the effectiveness of these

measures, and of the problems still in need of solution. And systematic efforts

are underway to communicate the findings of this research on a nationwide basis, in order to generate public understanding of the nature and extent of the adiustment problems and of the needed action.

Through the State employment services affiliated with the U.S. Employment Service, the Department is assisting employers in the reassignment of potentially displaced workers. It is helping to find jobs for those laid off and is otherwise aiding in their readjustment. The employment service offices have also been conducting a series of automation demonstration projects to discover and demon-*

strate what these offices can and should do in labor markets characterized by unemployment and rapid technological change. These projects are intended to provide information about the effects of new technologies on occupations, make intensive individual services such as counseling and testing available to affected workers, and promote the adjustment of workers through training and retraining. The training programs for unemployed and underemployed workers made possible by the Manpower Development and Training Act and the Area Redevelopment Act are another important avenue to worker readjustment. It is antici- pated that training activities for displaced or potentially displaced workers will need to be expanded substantially, however, through both Government and private action.

With marked changes in employment requirements in process and in prospect

across the occupational spectrum, American workers will have greater need for adaptability in the years ahead. All workers—whether engineers, administrators, laborers, or clerks—face the possibility of occupational changes necessitating retraining and readjustment.

The importance of broad education and training as preparation for work is underscored by this need for flexibility. It is further increased by the narrowing of opportunities in unskilled work and the trend toward greater knowledge and skill requirements evident in many occupations. If the Nation is to have the highly skilled, flexible work force demanded by our advancing technology, it is essential to strengthen the educational and training opportunities available to

young people and to motivate them to take full advantage of these opportunities.

AUTOMATION AND ITS IMPACT: SELECTED REFERENCES

(By Mary R. Heslet, Economics Division, Library of Congress)

American Academy of Political and Social Science. Automation. Ed. by Charles C. Killingsworth. Philadelphia, 1962. 198 p. (Its Annals, v. 340, March 1962.) (Contents: The nature of automation. The current state of the art. The impacts of automation. Private and public policies for automa- tion. Epilogue: an international perspective.)

American Federation of Labor and Congress of Industrial Organizations. Indus- trial Union Dept. Automation and major technological change, collective bargaining problems; papers presented at a conference held under the auspices of the Industrial Union Department, AFL—CIO, April 22, 1958, Washington, D.C. [1958] 45 p.

American Federation of Labor and Congress of Industrial Organizations. Indus- trial Union Dept. Research Section. Automation's unkept promise. [1962] 28 p. (Industrial Union Department, AFL—CIO. Publication, No. 47.) Aronson, Robert L. Automation—Challenge to collective bargaining? Ithaca, New York State School of Industrial and Labor Relations at Cornell Univer- sity, 1959. 70 p. (Reprint Series No. 79.)

Automation: outlook for youth. American child, v. 44, November 1962: 1-16 partial contents: View from Washington (includes information on Area Re- development Act of 1961); Automation; Training for what? The school story. Automation and employment. First National City Bank of N.Y. monthly economic letter, November 1962 128-131. (Believes that automation is a

necessary part of industrial progress. Views the problems created by automation with optimism.)

Automation and shifting skill needs. New England business review, October 1962: 1-4. (Finds that the occupational structure of New England's work force shows that "skilled craftsmen's occupations are growing at about the same rate

as total employment, while semiskilled and unskilled jobs are declining. Auto-
NATION'S MANPOWER REVOLUTION 3495

mation has reduced the need for workers to enter directly into the production

processes * * *.")

Automation and unemployment. International teamster, v. 58, May 1961:

14-18. (Discusses effects of technological changes in trucking operations.)

Automation and youth. The American Child, 42, March 1960. 24 p. Articles

by Ewan Clague, Jerome Rosow, Walter Reuther and other on the effects of

automation on the training and employment of youth in the 1960's.

Automation, productivity and jobs. IUD digest, v. 5, Fall 1960: 121-129.

(Contends that automation has been responsible for the greater part of the

unemployment problem and that a shorter work week would seem to be the best

solution.)

Backman, Jules. Cushioning the impact of technological change. Labor law

journal, v. 13, September 1962: 731-746. (Reviews some findings of committees

set up specifically to study the problem created by technological change.

Provision of jobs by retraining the worker, attrition, and protecting the wage

levels of workers who are shifted aTe three of the solutions discussed.)

First steps toward fair work rules. Nation's business, v. 48, June 1960:

106-110. (Shows how some companies find the answers to automation and

featherbedding problems.)

Wages, non-wage benefits and technological change. Commercial and

financial chronicle, v. 195, February 22, 1962: 3, 26-27. (Analyzed in detail is

the latest non-wage benefit—viz, protection against the adverse effects of

technological change upon labor.)

Bannon, Ken, and Nelson Samp. Impact of automation on Ford-UAW relationships. Monthly labor review, v. 81, June 1958: 612-615. (Contents: Rates

and classifications. Changing skills and retraining. Seniority adjustments.

Effect on highly skilled classifications.)

Black, James Menzies. The hidden trap in automation. Dun's review, v. 77,

May 1961: 53-59. (Maintains that the most difficult problem in connection

with automation is the retraining of displaced workers.)

Blumenfeld, F. Yorick. Unemployment and new jobs. Washington, Editorial

Research Reports, 1961. 53-99 pp. (v. 1, no. 5, February 1, 1961). (Contents: New Administration and the job problem. Full employment goal and

automation. Proposals for expanding job openings.)

Bright, James R. Does automation raise skill requirements Harvard business

review, v. 36, July-August 1958: 85-98. (The author from personal observation

concludes "that automation does not, in most cases, increase the demands on the

worker's skill, education, and attention. In a great many instances, in fact,

it does just the opposite. In his article Mr. Bright documents these findings.

He also offers a rationale or theory of the impact of automation on skill requirements.)

Brozen, Yale, Automation's impact on capital. Commercial and financial

chronicle, v. 188, Sept. 4, 1958: 14, 26. Believes that "automation, plus

investment and capital savings, and expected population increase, will raise

national income 15 percent in next 4 years, increase wages 8 percent, raise

returns per unit of capital 5 to 10 percent, and provide larger capital returns."

Buckingham, Walter S. Automation: its impact on business and people. New

York, Harper [1961] 196 p.

Buckingham, Walter. The human side of automation. Business horizons, v. 3,

Spring, 1960: 19-28. (Analyzes the reasons for automating and the effects on

commerce, management, and labor.)

Chamber of Commerce of the United States of America. Economic Research

Dept. Automation and unemployment. Washington, Chamber of Commerce

of the United States [1961] 34 p. (Analysis of long-term structural unemployment and measures to cope with it.)

Cheek, Gloria. Economic and social implications of automation. East Lansing,

Michigan State University Labor and Industrial Relations Center [1959].

125 p.

Clague, Ewan. Social and economic aspects of automation. Labor law journal,

v. 12, September 1961: 795-803. (Discusses some of the public and private

programs dealing with the step-child of automation—structural unemployment.)

Clague, Ewan and Leon Greenberg. Technological change and employment.

Monthly labor review, v. 85, July 1962: 742-746. (Covers the period, 1953-59

and includes over 200 industries.)

Coburn, Carroll L. A union view of automation. In: Proceedings of New York

University 14th annual Conference on Labor, New York, Matthew Bender
3496 NATION'S MANPOWER REVOLUTION

& Co., 1961. pp. 313-327. (Discusses effect of automation on employment, workers, and the economy. Suggests measures to meet the problems.)

Computers start to run the plants. Business week, November 5, 1960: 50-78. (Finds that "at an accelerating pace, the machines are taking over the ultimate

job of production supervision.")

Dankert, Clyde E. Technological change and unemployment. Labor law journal, v. 10, June 1959: 393-404. (Maintains that "automation has improved the methods of production, but it has also become a source of concern.

Many persons have lost their jobs as a result of such advancing technology, contributing greatly to the lists of the unemployed. This article discusses

many of the solutions, governmental and nongovernmental, that have been attempted and are being attempted to cope with the problem.")

Davidson, Bill. Our biggest strike peril: fear of automation. Look, v. 25, April 25, 1961: 69-76. (The author quotes President Kennedy as follows

"'in 1961, with the advent of automation, we have just now entered into the

Second Industrial Revolution. We all want to enjoy its benefits, but I'm

going to try my best to see that, this time, it is not accompanied by similar fear

and hardship'. The re-training of workers receives particular attention.)

Davis, Louis E. The effects of automation on job design. Industrial relations,

v. 2, October 1962: 53-71. (Finds that "automation tends to involve job enlargement, increased responsibility, and relative self-reliance. It seems likely

that automation will require more flexible job evaluation schemes.")

Diebold, John. Automation, 1958: Industry at the crossroads. Dun's review

and modern industry, v. 72, August 1958: 36-38, 92-97. (Discusses the record

to date and things to come.)

Automation: its impact on business and labor; and a statement by the

NPA Committee on Automation. Washington, National Planning Association, 1959. 64 p. (Planning pamphlet no. 106, May 1959.)

Automation: its implications for counseling. Occupational outlook

quarterly, v. 6, September 1962: 3-6. (The counselor should not overemphasize specific skills at expense of developing basic capabilities, to prepare a person

for future occupational trends.)

Facing up to automation. Saturday evening post, v. 235, September 22,

1962: 26-31. (An expert warns that our economic survival depends on wiser

use of the new technology.)

Life under automation. Challenge, v. 9, December 1960: 20-25. (An

interview in which the head of a management consultant firm examines the

social and economic consequences of automation.)

Econopouly, Nicholas. The challenge of automation. Education, v. 80, January, 1960: 303-306. (The need to adjust education to the demands of technology and industry.)

Edwards, Joe. Union reaction. Michigan technic, v. 77, October 1958: 24-26.

(Finds that unions vary quite a bit in their attitude—some appear to be quite

cooperative, while others oppose automation.)

Effects of mechanisation and automation in offices; pts. 1-111. International

labour review, v. 81, February 1960: 154-173; March 1960: 255-273; April

1960: 350-369.

Evans, Luther arld George E. Arnstein, eds. Automation and the challenge to

education; proceedings of a symposium, held in Washington, D.C. Sponsored

by the Project on the Educational Implications of Automation, National Education Association. [Washington, Project on the Educational Implications of

Automation, National Education Association] 1962. 190 pp.

Fabrizius, Peter. Automation—friend or foe? Delphian quarterly, v. 44, Spring

1961: 1-5, 10. (Sees new opportunities if a high degree of cooperation is

attained.)

Fanning, John H. The challenge of automation in the light of the natural law.

Labor law journal, v. 11, October 1960: 875-882, 960.

Faunce, William A. Automation in the automobile industry; some consequenc•,s

for in-plant social structure. American sociological review, v. 23, August 1958:

401-407.

Francois, Bill. The fear of tomorrow. Progressive, v. 26, May 1962: 16-19.

(Discusses the problem of increasing unemployment due primarily to greater

automation.)

Goldberg, Arthur J. Automation—threat or opportunity? Challenge, v. 10,

July 1962: 15-17. (The steps that should be taken to prepare for the social

and economic changes that inevitably accompany automation.)

. Challenge of 'Industrial revolution II' New York Times magazine, April

2, 1961: 11, 36-37. (Maintains that the pace of automation is quickening.
NATION'S MANPOWER REVOLUTION 3497

To attain its promises and avoid its perils will demand enlightened planning by

business, labor, and the general public.)

Goldberg, Arthur J. How will automation affect your job? Popular Mechanics,

v. 117, January 1962: 126-131, 220. (Points out the probable trends of the

1960's. Stresses the increased need for improved skills.)

Gomberg, William. Problems of economic growth and automation. California

management review, v. 3, Summer 1961: 4-17. (Observes that automation is

downgrading skilled labor and also is constricting capital. Makes suggestions

for aiding economic stability.)

Governor's Conference on Automation, Harvard University, 1960. Governor's

Conference on Automation, Graduate School of Business Administration,

Harvard University, June 2 and 3, 1960. 40 p.

Helstein, Ralph. Bargaining isn't enough. I.U.D. digest, v. 77, Summer 1962:

3-8. (Urges that an all-out national effort be made to solve the problems created by automation.)

Horowitz, Morris A. Automation and full employment: a public point of view.

In: Proceedings of New York University fourteenth annual Conference on

Labor, New York, Matthew Bender & Co., 1961. pp. 329-338. (Outlines

plan to alleviate the burden of the technologically unemployed while distributing

the cost among the various sectors of the economy.)

The impact of automation—a challenge to America. AFL-CIO American federationist, v. 68, August 1961: 12-19. (Action, past and future, to aid in solving

the problem of unemployment and automation.)

Is automation a boon or a menace? Mill and factory, v. 70, February 1962:

65-70. (Contents: Arthur J. Goldberg—Unions and the government. George

Meany—Automation and the unions. John Snyder—Automation and industry.)

Jacobson, Howard B. Automation and society. Edited by Howard B. Jacobson and Joseph S. Roucek. New York. Philosophical Library [1959] 553 p.

Jakubauskas, Edward B. Technological change and recent trends in the composition of railroad employment. Quarterly review of economics and business,

v. 2, November 1962: 81-90. (Analyzes general trends in composition of railroad employment within specific occupational groups. A knowledge of specific

trends may for one thing suggest more meaningful approaches to retraining of

displaced workers.)

Kahn, Herbert L. Automation and employment. Labor law journal, v. 10,

November 1959: 796-804. (Portrays automation not as a threat to the human

race but as a tool to be used properly for advancing our standard of living.)

Killingsworth, Charles C. Automation—a search for answers. AFL-CIO,

American federationist, v. 68, January 1961: 20-23.

Three myths of automation. Nation, v

'

191, Dec. 17, 1960: 467-470.

(Strongly doubts the following three claims frequently made in regard to

automation: (1) "that mechanical improvements always create new jobs.

(2) that automation will come slowly. (3) and it will require massive upgrading

of the labor force.")

Kuhn, James. Strikes and technological change. Christianity and crisis, v.

23, Feb. 18, 1963: 15-19. (Believes that many strikes have been due to

increasing automation. Favors useful retraining programs, area relocation,

improved unemployment benefits, etc.)

Leterman, Elmer G. New jobs for millions. American legion magazine, v. 69,

Nov. 1960: 18-19, 44-45. (Point out that "automation can be beneficial to

workers by opening up new job opportunites in related lines of work.")

Lewis, John L. More machines, fewer men—a union that's happy about it.

U.S. news and world report, v. 47, Nov. 9, 1959: 60-64. (An interview in

which the President, United Mine Workers, tells what automation has meant

to miners of coal.)

Livingston, Frederick R. An approach to automation. In: Proceedings of

New York University fourteenth annual Conference on Labor, New York,

Matthew Bender & Co., 1961. pp. 301-311. (Discusses work of the Armour

Automation Committee.)

McConkey, Dale', D. The NLRB and technological change. Labor law

journal, v. 13, January 1962: 43-48. (Discusses certain of the more important

changes or adaptations which the Board may be forced to weave into its thinking as technological changes progress.)

McIntyre, William R. Automation and jobs. Washington, Editorial Research

Reports, 1959. 403-420 p. (Editorial Research Reports, v. 1, No. 21, June 3,

1959). (Contents: Automation in factories and offices. Automation and

employment changes. New job openings and organized labor.)
3498 NATION'S MANPOWER REVOLUTION

McKenna, J. V. Must automation destroy labor? America, v. 104, February

18, 1961: 661-663. (Believes that the problem of displaced workers due to

automation can be minimized by training for other jobs. Cites the retraining

program of the Air Force as an example.)

Maher, Edward I. Automation: A background memorandum. New York,

National Association of Manufacturers, April 1960. (Booklet published by

Clergy-Industry Relations Department and Clerical Advisory Council for

reading by clergymen and lay people, and for education and discussion

programs.)

Mann, Floyd. Automation and the worker; a study of social change in power

plants [by] Floyd C. Mann and L. Richard Hoffman. New York, Holt [1960]

272 p.

Maughan, John. The other side of automation. Dun's review and modern

industry, v. 79, May 1962: 42-44, 112-114. (Discusses the findings of the

Panel of Presidents (of 300 companies) in regard to their reaction to the impact

of automation.)

Michael, Donald M. Cybernation: The silent conquest. Santa Barbara,

Center for the Study of Democratic Institutions, 1962. 48 p. (Partial

contents: The problems of cybernation; Unemployment and employment;

Additional leisure; Education; Occupations and attitudes.)

Nicholson, Howard. Problem of the 60's—automation—unemployment and

the abundant life. Magazine of Wall Street, v. 107, March 11, 1961: 636-638,

680-681. (Believes that chronic unemployment could easily develop from the

present situation. Suggests several ways of coping with the problem.)

Northrup, Herbert R. Automation: Effects on unions, employment and labor

force. Commercial and financial chronicle, v. 190, Aug. 27, 1959: 11, 26-27.

(Denies that automation causes mass unemployment; explains what can be

done to ease technological displacement which he finds fortunately occurs

during prosperity and not recession.)

O'Connell, James T. Automation and governmental policy—tri-fold nature of

unemployment. Vital speeches of the day, v. 27, January 15, 1961: 220-222.

(Discusses the part being played by the govt. in dealing with this problem.)

Pie!, Gerard. End of toil. Nation, v. 192, June 17, 1961: 515-519. The effects

of automation and technological processes on the U.S. economy and the employment of workers. The author believes that "science offers a new world"

in this respect.)

Quinn, Francis X., ed. The ethical aftermath of automation. Westminster, Md.,

Newman Press, 1962. 270 p. (Papers of 18 experts on automation presented

at Woodstock College (Md.) Report of President's Advisory Committee on

Labor-Management Policy on Automation, pp. 241-260.)

Rezler, Julius. The impact of automation on the stability of manufacturing

employment. Current economic comment, University of Illinois, v. 20,

May 1958: 55-62.

Rogers, Jack D. Automation; technology's new face. Edited by Irving Bernstein.

Berkeley, Institute of Industrial Relations, University of California [1958] 94 p.

Seligman, Ben B. Man work and the automated feast. Commentary, v. 34,

July 1962: 9-19. (TO see what automation implies, we must examine the

kinds of machines employed and see what they do to people and organizations.)

Siegman, Jack and Bernard Karsh. Some organizational corrolates of white

collar automation. University of Illinois Bulletin, v. 59, February 1962:

108-116. (Reprint Series No. 10. Institute of Labor and Industrial Relations.)

Slesinger, Reuben E. Automation: its implications for today's economy. Social

science, v. 36, April 1961: 100-109. (Discusses several aspects of automation

which are difficult to cope with but which are gradually taken care of due to

economic adjustments.)

Smith, Georgina M. Office automation and white collar employment. [New

Brunswick, N.J.] Institute of Management and Labor Relations, Rutgers,

State University [1959] 26 p. (Institute of Management and Labor Relations.

Bulletin No. 6.)

Snyder, John I., Jr. The impact of automation. Challenge, v. 10, May 1962:

20-23. (An interview with the Chairman of the Board of U.S. Industries, Inc.,

a large manufacturer of automation equipment.)

Speroff, B. J. Automation and human relations: some problems and predictions.

Personnel administration, v. 25, March-April 1962: 4-11. (Some of the

problems considered are as follows: dislocations, retraining, leisure time, early

retirement, counseling, government controls, and new union rules.)
NATION'S MANPOWER REVOLUTION 3499

Suffridge, James A. Automation's impact has us worried. American federationist, v. 65, May 1958: 12-30. (Discusses various proposals to introduce

automation in wholesale and retail establishments.)

Sylvester, Harold F. The sweet sound of automation. I.U.D. digest, v. 7,

Summer 1962: 126-131. (Discusses the prospects for full employment in view

of the ever-increasing use of automation by industry.)

Taylor, George W. Collective bargaining and technological change. Monthly

labor review, v. 85, August 1962: 868-870. (Changes in existing system necessary to adapt collective bargaining to mid-20th Century environment.)

Townsend, Edward T. The human equation. Challenge, v. 9, February 1961:

16-20. (Discusses the problems involved in greater automation and the displacement of workers. Business and the unions hold opposing views.)

U.S. Bureau of Labor Statistics. Impact of automation; a collection of 20 articles

about technological change, from the Monthly labor review. Washington,

U.S. Govt. Print. Off. 1960. 114 13. (87th Cong., 1st sess., House Doc. No.

36 U.S. Bureau of Labor Statistics bulletin no. 1287.)

Impact of technological change and automation in the pulp and paper

industry. Washington, U.S. Govt. Print. Off., 1962. 92 p. (Its Bulletin

no. 1347. 87th Cong., 2d sess. House. Document No. 1347.)

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into types and causes of unemployment; hearings held in Washington, D.C.

March 8, 10, 20, 21, 22, 27, 28, 29; April 12, 17, 18, and 25, 1961. Washington,

U.S. Govt. Print. Off., 1961. 793 p.

Impact of automation on employment. Report of the Subcommittee on

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Cong., 1st sess. Committee print.)

U.S. Congress. House. Committee on Post Office and Civil Service. Office

automation and employee job security. Hearings before the Subcommittee on

Census and Government Statistics, 86th Congress, 2d session. March 2 and 4,

1960. Washington, U.S. Govt. Print. Off., 1960. 89 p. (Primarily concerns

employees of the Federal Government.)

U.S. Congress. Joint Economic Committee. New views on automation. Papers submitted to the Subcommittee on Automation and Energy Resources.

Washington, U.S. Govt. Print. Off., 1960. 604 p. (86th Cong., 2d sess. Joint

committee print.)

U.S. President's Advisory Committee on Labor-Management Policy. The benefits and problems incident to automation and other technological advances.

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comments od Dr. Arthur F. Burns and Henry Ford II who disagree with portions

of the findings of the Report.)

United Steelworkers of America. Steelworkers and automation. Pittsburgh?

[1961]. 30 p. (Study on problems created by automation in the steel industry.

Suggests action to be followed by the union, management, and the government.)

Walker, Charles R. Life in the automatic factory. Harvard business review, v.

36, January—February 1958: 111-119. (Believes that the attitudinal and

behavioral aspects of automation may turn out far more influential than the

technical aspects.)

Weinberg, Edgar. Adjustments to the introduction of office automation. Washington, U.S. Dept. of Labor, Bureau of Labor Statistics, 1960. 86 p. (U.S.

Bureau of Labor Statistics. Bulletin no. 1276.)

Wiencer, Norbert. Some moral and technical consequences of automation.

Science, v. 131, May 6, 1960: 1355-1358. (Points out that "as machines learn

they may develop unforeseen strategies at rates that baffle their programmers.")

Wilcock, Richard C. Fast changing technology—its impact on labor problems.

Champaign, Institute of Labor and Industrial Relations, 1960. 9 p. (Institute of Labor and Industrial Relations, reprint series no. 81.) (Reprinted

from the Pennsylvania business survey, Dec. 1959—Penna. State Univ. Discusses future occupational trends and the impact of automation on the labor

market, on the labor movement, on education, etc.)

Winthrop, Henry. Some psychological and economic assumptions underlying

automation, pts. I and II. American journal of economics and sociology, v.

17, July 1958: 399-412; v. 18, October 1958: 71-82.
3500 NATION'S MANPOWER REVOLUTION

Wirtz, W. Willard. Changing profile of the nation's work force. Occupational

outlook quarterly, v. 7, February 1963: 3-6. (Points out that automation,

both on the farm and in the factory, is in large part responsible for unemployment. Training in new skills must be increased.)

Woods, Reginald F. Automation; its effect on the worker and his job, parts I

and II, Cornell engineer, v. 26, March 1961:22-25; April 1961:23-26. (Contents: Part I, Automation vs. skill. Automation vs. the physical aspects of

work. Part II, Automation vs. job security. Automation vs. wage policy.

Labor viewpoint. Summary.)

Worsnop, Richard L. Approach to thinking machines. Washington, Editorial

Research Reports, 1962: 539-554. (Editorial Research Reports, July 25,

1962, v. 2, no. 4.) (Contents: Evolution of new family of machines. Computers in government and business. Impact of new machines on employment.)•

Bibliographies

Hogan, Howard K. Technological advances and skilled manpower, implications

for trade and industrial education; an annotated bibliography. Washington,

U.S. Office of Education, Division of Vocational Education, Trade and Industrial Education Branch, 1956. 67 p. (U.S. Office of Education, mics. no.

3509.)

U.S. Bureau of Labor Statistics. Implications of automation and other technological developments; a selected annotated bibliography prepared by James

R. Alliston. Washington. U.S. Govt. Print. Off., 1962. 136 p. (Its Bulletin

no. 1319. 87th Cong., 2d sess. House. Doc. no. 328.)

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implications; a selected annotated bibliography. Washington, U.S. Govt.

Print. Off., 1956. 78 p. (U.S. Bureau of Labor Statistics. Bulletin no. 1198.)

PREPARED STATEMENT OF LEON GREENBERG, ASSISTANT COMMISSIONER FOR

PRODUCTIVITY AND TECHNOLOGICAL DEVELOPMENTS

PRODUCTIVITY AND TECHNOLOGICAL TRENDS IN THE PRIVATE ECONOMY, 1947-62

In response to the request of the subcommittee, this paper presents some

statistics of trends in productivity in the U.S. economy and some related data

on technological change. The main points to be covered include (1) recent

trends in productivity and how they compare with previous trends; (2) relationship of change in productivity to change in output; (3) analysis of trends for

major sectors of the economy; (4) an illustrative statement of current technological developments.

In attempting to analyze and evaluate the trend of productivity, it is almost

impossible to avoid controversy. Even those analysts who are trying to formulate objective judgments may come to different conclusions using the same body

of information. In addition, productivity is caught up in the net of collective

bargaining, where workers are concerned with income and job security and

employers with costs and profits.

There can be reasons for differences in interpretation and evaluation. Various

ratios of output to input can be computed and there is no single productivity

index which answers any and all questions. Indexes may cover the economy,

major sectors, or individual industries. Different time periods may be covered

and may be affected by such factors as the business cycle and war production

efforts. Even the word productivity is in some dispute, where some invariably

define is as output per man-hour while others maintain that it must include

captal as well as labor inputs.

There are, unfortunately, some statistical problems in measurement because

the data are not always as precise as we would like them to be.

Despite these difficulties it is possible to develop a logical framework for

analysis in terms of both industrial and time period coverage.

When evaluating productivity for technological impact on the labor force—on

employment and unemployment—a useful ratio is output per worker or per man-
NATION'S MANPOWER REVOLUTION 3501

hour. This ratio helps in studying progress in manpower utilization and its

corollary, labor requirements.

It is helpful to first examine the productivity of the entire private economy.'

This total reflects the changes that have been going on among all the component

industries as well as the shifts among these industries or sectors. For example,

a shift of manpower from farms to factories can raise the productivity of the

economy because the dollar value of output per man-hour; i.e., the level of productivity in manufacturing is higher than in agriculture.

So the measure for the total private economy is useful as an overall indicator

of productivity change; that is, of the total change in output per person or per

man-hour resulting from technology and other factors affecting the structure of

the economy. But it is also necessary to examine the components of this measure

in order to explain and understand some of the changes which have taken place.

Moreover, the changes should be pinpointed, insofar as is feasible, to the particular industrial sectors in which they are occurring. Is the impact of technological change uniformly pervasive throughout the economy, is it randomly

scattered, or is it concentrated in a few key spots?

Finally, it is important to examine recent trends, but a good deal of the evaluation must grow out of some understanding of cyclical or other "wave" influences

and out of comparison with previous time periods.

Output per employee—Total private economy

In tracing the progress of productivity and the impact of technological change,

it is usually preferable to work with the ratio output per man-hour. However,

trends in employment and unemployment are most frequently described in terms

of number of persons in the labor force. Therefore, as a starting point, it may

be useful to indicate what has happened to output per employee (including the

self-employed) based on labor force estimates.

Output per employed person in the private economy increased at an annual

rate of 2.5 percent in the last 5 years (1957-62). This is slightly lower than the

2.7-percent rate of increase for the postwar period as a whole (1947-62). (Table

38 and chart 48.)

Output rose more than output per employee in 11 of the 15 postwar years and,

of course, employment rose in those years. Employment declined when output

per person rose faster than output. For the postwar period as a whole and for

the last 5 years, on the average, output increased more than output per person

and employment rose about 0.7 percent a year.

The output per employee figures are affected both by average hours per worker

and by output per man-hour. The latter is a more useful measure for studying

the impact of technological change and the rest of the discussion will be in those

terms. For this purpose, man-hour information from the establishment surveys

made by the Bureau of Labor Statistics will be used.'

Output per man-hour—Total private economy

Productivity (output per man-hour) in the private economy increased about

4 percent in 1962. This was a relatively large increase. However, large increases also occurred in other years. 'Small increases of 2 percent or less occurred in some years of the postwar period. Thus, productivity changes have

not been uniformly distributed but have varied from year to year (chart 49

and table 43).

Because of these annual fluctuations, it is difficult, and perhaps misleading,

to generalize or draw inferences about changes in trend on the basis of 1 or 2

years' experience. Exactly what period of time is best for measuring trends

cannot be precisely determined, but it is not unreasonable to consider averages

covering 5 years or more.

During the period 1957-62, output per man-hour in the private economy increased at an annual rate of 3 percent (table 39). If we go back to 1947, we

find that the average increase for any consecutive 5-year period (e.g., 1956-61,

1955-60, 1947-52—there are 10 such periods) was 2.5 percent or more.

Moving back to cover a 10-year period, the average increase, 1952-62, was 2.8

percent. For the 15-year postwar period as a whole, output per man-hour increased at an average rate of 3 percent a year.

1 General government is usually excluded because there is, as yet, no way of measuring

the output of the public sector except as reflected by wages and salaries.

2 These man-hours are based on employment and payroll data submitted by a large

sample of employers. They are considered more reliable than man-hours from the labor

force series. In addition, industry detail is available from the estailishment series but

not from the labor force series.
3502 NATION'S MANPOWER REVOLUTION

There are two other related pieces of information which can help put these

averages in better perspective. One is the longrun rate of productivity change.

The other is the relative change in output.

In the period 1909-47, output per man-hour of the private economy rose 2

percent a year. For the entire longrun period 1909-62, which of course reflects

the influence of the postwar years, the average rate was 2.4 percent. Thus,

productivity for the postwar period as a whole and for the last 5 years has

increased at a more rapid rate than over the long run.

The longrun rate is also influenced 'by the decline in productivity which occurred in the early years of the depression. But it is difficult to find any long,

sustained period with an average productivity gain as high as that of the 3.percent for the postwar period. In the decade 1919-29, when performance was

relatively good, the average rate was about 2.9 percent. For the 15-year period

1930-45 the average increase was high, 3.4 percent. But this period starts at a

depression low point and ends at a peak war year, so it is quite atypical.

With regard to the other point mentioned earlier, the relationship of productivity to output, it has been generally established that over short periods of

time productivity changes are closely related to changes in output. During

business cycle expansion, when output goes up rapidly, productivity also tends

to increase rapidly. In the downturn, productivity may also decline or show

a smaller increase.

For the postwar period as a whole, and for the last 5 years, output went up

more than productivity. However, the differential between output and productivity was rather small. For example, in the period 1957-62, private output

went up 3.3 percent while output per man-hour rose 3 percent per year.

In summary: Output per man-hour in the total private economy has moved

up at an average rate of about 3 percent for the last 5 years. This is about

the same as the postwar rate, and significantly higher than the longrun average.

In the past 5 years output has exceeded productivity but by a small margin.

Output per man-hour in major sectors

The review of trends for the total private economy has been important for

an overall view of the progress of productivity and its relationship to total

output. However, as indicated earlier, the component sectors make varying

contributions to the overall movements. What happens in these sectors may be

important for an understanding of some of the employment implications of technological change.

Agriculture

A great deal has already been written about the great productivity performance of the agricultural sector. Agricultural output per man-hour improved

very slowly (less than 1 percent a year) in the years between 1909 and the mid1930's, then picked up speed and in the 15-year period since 1947 has averaged

5.8 percent per year (tables 39 and 40).

This sustained rise in agriculture is the result of several factors. One is

Improved technology, which has contributed via the use of farm machinery

and the application of chemistry and biology to seed, soil, and insect pests.

Also contributing has been the trend toward large-scale farming with its concomitant mass production techniques (as in chicken farming). A related factor

has been the abandonment of small, less productive farms, and the decline in farm

population, leaving fewer workers to till the land. Total agricultural man-hours

have declined almost every year of the postwar period as productivity has

exceeded output.

Annual changes in agricultural productivity tend to be much more volatile

than those for the rest of the economy. They have ranged from a decline of

nearly 5 percent (1949) to an increase of 19 percent (1948). The weather and

Its effect on crops is, of course, important on a year-to-year basis.

Because of the large annual fluctuations, changes in trend are not always

easily discernible. Nevertheless, there does seem to have been a slowing down

in the rate of productivity growth in this sector during the latter part of the

postwar period. The average rate for the last 5 years was 4.7 percent. compared

with 5.2 percent for the last 10 years and 5.8 percent for the last 15 (table 39). _

Total nonagriculture

Productivity in the total nonagricultural sector has shown a postwar trend

similar to that of the total private economy. It averaged a high rate of increase

in the early postwar years, slackened off, and picked up in the last 5 years. The

postwar average was 2.4 percent, the average for the last 5 years was 2.7 percent.
NATION'S MANPOWER REVOLUTION 3503

The postwar rate of increase has exceeded the longrun average, which was

1.9 percent for the period 1909-47. If the postwar period is added the longrun

rate is 2.1 percent (tables 39 and 40).

Further analysis of this large sector is helped by examination of two major

components—manufacturing and nonmanufacturing, where different movements

have occurred.

Manufacturing

Some significant trends appear to be occurring in the manufacturing sector

of the economy. Output per man-hour has gone up more than 4 percent a year

in each of the years 1961 and 1962. The increase in 1961 was not unusual because

it followed a year of low gain (2.1 percent). However, it is somewhat unusual

to have 2 successive years of large increases.

Since some caution has to be observed in examining changes over a short

span of time, we can extend the time period of analysis. In the last 5 years

(1957-62) productivity increased at an average annual rate of 3.4 percent. This

is about in line with the early part of the postwar period but substantially higher

than the middle years spanning the period 1953-58. The average postwar rate

was 2.7 percent (table 39 and chart 50).

We do not have data for comparison with long-term trends since these recent

figures are based on man-hours of all employees in manufacturing—including

the white-collar workers. Data for production workers—postwar and long

term—will be discussed later.

Comparisons with output are also of some interest. Over the first 10 years

of the postwar period, 1947-57, output went up substantially more than productivity-4.3 versus 2.8 percent—so there was a margin for expansion in employment. However, since 1957, the average increase in output barely exceeded the

average gain in productivity (3.6 versus 3.4 percent), so the margin for increasing

employment was very small.

The problem inherent in this comparison shows up more sharply if we calculate

output per man-hour for production workers alone. Here, the average increase

for the last 5 years was 4.1 percent, compared with an average productivity gain

of about 3/12percent for the entire postwar period and with 3.1 percent for the

long period 1909-47.

It should be pointed out that, in the decade 1919-29, output per man-hour of

production workers increased at the high rate of 5.3 percent a year. But output

increased at the same rate during that period, so there was no net decline in total

hours of production-worker employment. In the past 5 years, however, output

went up less than the productivity rate for production worker man-hours (3.6

versus 4.1 percent) and production-worker employment declined. In the first

decade of the postwar period it was the other way around (4.3 versus 3.6

percent).

So, we seem to be experiencing high rates of productivity increases in manufacturing in the face of smaller gains in output. This implies a relatively higher

impact of technological change or of 4ther labor-saving factors in the manufacturing process. It also points up the problem of job opportunities for blue-collar

workers. (The changing occupational-industrial mix will be covered by another

Department of Labor witness. Industry trends within manufacturing will be

discussed in a later section.)

Nonmanufacturing

In contrast to manufacturing, there do not appear to have been any significant

developments in the rate of productivity change in the nonmanufacturing sector

as a whole during the postwar period. The increase in the last 2 years has been

higher than average, but not unusual compared with other years. The average

annual increase for the last 5 years was 2.4 percent; for the postwar period it was

2.3 percent ( table 39 and chart 50) .

There has been some change, however, in the output-productivity relationship.

Output has generally gone up more than productivity throughout the postwar

period, but output has not gone up as fast in the last 5 years as in earlier years.

In the period 1947-57, output went up at 4 percent a year compared with 2.3 percent for productivity; from 1957-62 the rates were 3.3 and 2.4 percent, respectively. Thus, there has been a declining margin of employment opportunity in

the nonmanufacturing sector.

Productivity and employment

It is very difficult to pinpoint the cause and effect relationship between productivity and employment. There does not seem to be much question that in our

1/4
3504 NATION'S MANPOWER REVOLUTION

longrun economic history there has been a close relationship between productivity improvement and growth—growth of output. employment, income, and

leisure time. In short-time periods, some establishments may have to meet

competition by increased productivity and lower costs—in this sense, a further

decline in employment of the particular plant may be prevented by its improved

competitive position.

Quite often, in the short run, the process of productivity change is accompanied

by sharp dislocation—by displacement of workers and the need to shift to other

work, in different occupations, industries, or localities. In a maximum employment opportunity environment, the shifts may be accomplished easily. But if

output is not increasing fast enough, if workers lack necessary education or

skills, if discriminatory bars exist, if there are impediments to mobility, then

long-term and high-level ratios of unemployment may arise.

Some attempts have been made to examine more intensively the relationship

between productivity change and employment, at least on an industry basis.

For example, Commissioner Ewan Clague and I presented an analysis of the

productivity-employment relationship in a paper given before the American

Assembly in 1962, where we showed this relationship for several hundred industries covering the periods 1947-57 and 1953-59. I would like to present a similar

analysis, covering a later period. Before doing so, it is useful to establish a

broader framework which may help in understanding the size of the problem.

If productivity is increasing at about 3 percent a year, and with about 60

million persons employed in the private economy (in 1962), output has to expand

sufficiently to provide 1.8 million additional jobs per year, otherwise unemployment will increase.' ( In future years, as the labor force increases, the number

of jobs required will also increase, even without any increase in the percentages.)

In the period 1957-62, output went up a little more than productivity. But

this does not mean that there was no displacement. The annual figures show

reverse ratios in some years, and the figures for the component sectors agriculture, manufacturing, and nonmanufacturing show even larger differentials of this

kind. For example, as has already been pointed out, output increased less than

output per man-hour of production workers in the period 1957-62, so few production workers were required.

A detailed analysis has been made of 200 industries in manufacturing, for the

period 1957-61 (1962 data are not yet available) .4 ( See table 41.)

To put the detailed figures in a proper setting, the following trends, 1957-61, are

useful; output went up 7.8 percent and output per man-hour of production

workers rose 17.7 percent. Thus, there was a decline of 8.4 percent or 1.1 million

in production-worker employment. ( There was no change in average annual

hours paid for during this period.)

Was this decline of 1.1 million production workers associated with productivity gain or output decline? The detailed industry analysis shows the following (table 41) .5

1. The decrease of 1.1 million was a net figure resulting from increased employment in some industries, lower employment in others.

Increase 229, 000

Decrease 1, 323, 000

Net decrease 1, 094. 000

2. Of this total decrease, some was associated with declining output, some with

productivity gain.

Associated with lower output 576, 000

Associated with higher productivity 747, 000

Taal decrease 1,323,000

3In addition, jobs must be provided for new entrants to the labor force. The public

sector is, of course, also a provider of jobs. It can be included in the calculations by

lowering the productivity rate and raising the employment base.

14 Some of the industry estimates may be subject to a high margin of error, but the crosssectional analysis which has been prepared assumes that the errors are random, so no

particular bias is introduced in the results. Separate estimates for the individual indus—

tries are not available for publication.

5 Table 41 shows "unit man-hours" which can be related, arithmetically, to changes in

employment. Productivity, or output per man-hour, is just the reverse of unit man-hours

and is used in the text to maintain continuity of terminology.
NATION'S MANPOWER REVOLUTION 3505

These figures, reduced to an annual basis, indicate that the employment decline among manufacturing industries amounted to 331,000 production workers

per year, of which 144,000 was associated with declining output and 187,000 was

associated with increasing productivity.

The decreases in employment are not necessarily equivalent to layoffs—some

workers retire, some leave voluntarily for other jobs. On the other hand, these

represent industrywide figures over a 4-year span. More detailed compilations,

on a plant-by-plant, year-by-year basis, would show additional job decreases, and

job increases, and, therefore, indicate a greater degree of dislocation and job

shifting.

Technological developments

The analysis thus far has dealt with trends which can be measured—output,

employment, output per man-hour. While the last of these is an indicator of technological change, it is not a precise measure because changes may also be the result of other factors operating at the same time (scale of operation, the business cycle, management and worker skills, industrial relations, raw materials

supply, etc.). In addition, some types of important technological change, par- ticularly those reflected in new materials or new products, may not be directly

reflected by a productivity index. They may, however, result in the decline of

some industries and the growth of others. So it is not possible to measure in a

precise way the impact of technological change. Often, description and quali- tative evaluation are the best that can be done.

There are many technological changes taking place throughout the economy,

and we must be careful to be neither overwhelmed by nor indifferent to their possible impact.

Many developments may affect only a small number of employers and workers.

Change has occurred in past decades as well as in the present. In some cases

an important technological breakthrough may be job creating rather than job displacing. And too often, new technologies provide the basis for gloomy feature stories, even though they are scarcely off the drawing board and are untried

or untested.

Nevertheless, there are many important technological changes taking place which may have a serious impact on the number of workers required, on the kinds

of skill and training they must acquire and on the need to shift from one industry to another, or from one geographic area to another. Such changes can

result in severe hardship for many individual workers.

The Department of Labor is cognizant of the need for prevention as well as amelioration and has undertaken a number of pertinent programs under the

Manpower Development and Training Act. In the toepartment's Bureau of Labor Statistics, our Office of Productivity and Technological Developments is orienting its automation research program toward a look at the future. We have several studies underway and on the basis of our preliminary research,

it is possible to illustrate some of the technological developments that are taking place with examples from a few industries.

Bituminous coal mining

This industry has already experienced large increases in productivity accom- panied by a drop in production and a sharp decline in employment.

Several developments are taking place which will probably maintain a high

rate of productivity gain. These include automation of underground mining, increasing use of continuous mining machines, and other improvements in un- derground equipment and greater use of large-scale stripping equipment in surface mining.

Possible offsets to the productivity impact on labor requirements include costsaving developments, such as Unitrain and the coal pipeline for transporta- tion of coal, and research for new uses of coal and broadening of its markets.

Electric power

Output in this industry has increased in the last 5 years but there has been

a slight decline in employment.

Technological developments which are already underway include the use

of automatic dispatch systems, electronic data processing for office operations,

the use of computers in powerplants, and the introduction of larger units in generating plants (which require fewer employees per unit of output). Elec- tric power from nuclear reaction is not expected to be competitive with conventional power until the late 1960's. Other new sources, such as the fuel cell,

35-388 0-164--pt. 10-11
3506 NATION' S MANPOWER REVOLUTION

thermionic tube, thermoelectric generator, and solar cell, are still in very early

stages of development.

Since production of electric power is expected to increase, it may balance off

the labor-displacing aspects of technological change.

Electronics

Employment in this industry has increased fairly substantially in the last 5

years as output has increased.

Improvement is taking place in production techniques, which include semiautomatic equipment, mechanical (rather than manual) circuit board a..ssembly,

and other special equipment. Microelectronics; that is, the use of miniaturized

electronic assemblies, is being developed and may be in great demand. This

development may require more workers in fabrication relative to assembly. A

great deal of research and development is also taking place in this industry.

The current technological environment plus defense needs are likely to result

in continued expansion of this industry.

Insurance

Employment in this industry has expanded throughout the postwar period.

Large companies employing a large percentage of the industry's workers already have electronic computers. Future employment Impact may arise from

more efficient and more intensive applications. The use of reading devices

could eventually reduce processing by keypunch operators. Faster communication systems between branch and agency offices and the central office could affect branch office labor requirements. Some marketing trends, such as direct

selling and group coverage, may reduce needs for agents.

These changes suggest a tightening of job opportunities for routine clerical workers and for operators of conventional electric accounting machines. The

extent to which this will occur will depend on the rate at which the insurance

industry continues to expand its activities.

Pulp and paper industry

Output per man-hour in this Industry has gone up more than the manufacturing

average since 1957. Output has gone up a little less so employment has declined.

The spread 'between productivity and output may continue for the next few

years because of further technological improvements. These include more

widespread use of continuous pulping equipment, more extensive and elaborate

instrumentation and automatic control, and improvement in materials handling.

Possible new uses for paper may expand markets and offset the effect of

productivity growth on jobs. These new uses may involve paper coated with

plastics, development of stretchable kraft paper and inexpensive paper substitutes for textile products.

Textile mill production

Output has increased since 1957 but employment has declined.

A number of technological developments could lead to reduced unit labor

requirements. These include introduction of continuous automatic spinning

which will affect such operators as picker tenders, card tenders, and spinning

and winding operators. Higher speed textile machinery with larger packages,

greater use of synthetic fibers which in some cases require less labor than

natural fibers and automatic cleaning and handling devices are reducing manual

labor requirements.

Possible offsets to lower unit labor requirements may arise from research

and development in new uses and new kinds of textile fabrics, which would

expand the potential market.

Steel

Output per man-hour in this industry has not gone up at a rapid rate in the

last 5 years or so—it is less than the average for manufacturing, but because

volume of output has not expanded there has been a decline in employment, -

There are several important technological innovations taking place. Improved techniques in the preparation and processing of ore are expected to increase the productivity of blast furnaces. Continuing improvements in and

Increased use of the basic oxygen process are expected to increase productivity in

steelmaking. Another new and major development is continuous casting, which

can result in greater capital savings and lower operating costs. Instrumentation and automation in finishing mills are being steadily extended. Two factors which may hold down the rate of output are competition from other products,
NATION'S MANPOWER REVOLUTION 3507

such as other metals and plastics, and coinpetition from other countries who are

engaged in extensive research programs to improve their own steelmaking

processes.

All these factors would suggest reduction in employment in this industry. The

extent to which this reduction will be offset by increased output depends on

developments in steel-using industries and the extent to which the steel industry, through its own research programs, will improve its competitive position

with regard to other products.

Metalworking

Employment in metalworking industries has declined slightly in the last 5

years, all of it concentrated among production workers.

A number of important technological developments are taking place. One is the numerical control of machine tools which, thus far, has been used in only

a few industries. But it is expected that a large percentage of new machine tools in the later 1960's will be numerically controlled. Automatic transfer lines are

now being used in metalworking industries. There is improvement in materials

handling equipment and automation of inspection operations.

Man-hour requirements for this industry will be affected not only by technology but also by the business cycle, foreign competition, Government defense

needs, and developments in other industries.

TABLE 38.-Average annual percent change' in output per person, output, and

employment-Total private economy, selected periods, 1947-62

Item 1947-62 1952-62 1957-62

Output per person 2.7 2.2 2.5 Output 3.4 2.9 3.3 Employment 2 .7 . 8 .7

I Computed from the least squares trend of the logarithms of the index numbers.

2 Based primarily on labor force data. Includes self-employed and unpaid family workers in addition to wage and salary workers.

TABLE 39.-Average annual percent change' in output per man-hour and related

data, total private economy and major sectors, selected periods, 1947-62 2

Sector

Period

1947-62 1952-62 1957-62

Total private:

Output per man-hour 3.0 2.8 3.0 Output 3.4 2.9 3.3 Man-hours . 4 .2 .3 Agriculture:

Output per man-hour 5.8 5.2 4.7 Output 1.4 1.2 1.3 Man-hours -4.1 -3.8 -3.2 Nonagriculture:

Output per man-hour 2.4 2.3 2.7 Output 3.5 3.0 3.4 Man-hours •-•,- 1.1 . 7 .7 Manufacturing (all persons):

Output per man-hour 2.7 2.7 3.4 Output 3.3 2.3 3.6 Man-hours 1 . 6 -.3 .2 Manufacturing (production workers):

Output per man-hour 3.6 3.6 4.1 Output 3.3 2.3 3.6 Man-hours -.3 -1.2 -.4 Nonmanufacturing:

Output per man-hour 2.3 2.3 2.4 Output 3.7 3.4 3.3 Man-hours 1.4 1.1 .9

I Computed from the least squares trend of the logarithms of the index numbers. 2 man-hours based primarily on establishment data. Includes man-hours of self-employed and unpaid family workers in addition to age and salary workers, unless otherwise indicated.
3508 NATION'S MANPOWER REVOLUTION

TABLE 40.—Average annual percent change,' total private economy, agriculture,

and nonagriculture, 1909-47 and 1909-62

Sector 1909-47 1909-62

Total private:

Output per man-hour 2.0 2.4

Output 2. 7 2.9

Man-hours 2 .7 .5

Agriculture:

Output per man-hour 1.3 2.4

Output .6 .9

Man-hours —.7 —1.5

Nonagriculture:

Output per man-hour _ 1.9 2. 1

Output 2.9 3. 1

Man-hours 2 1.0 1.0

1 Computed from the least squares trend of the logarithms of the index number.

2 Based primarily on establishment data.

TABLE 41.—Relationship between changes in employment and in unit man-hours

for production workers,' manufacturing, 1957-61

[Workers in thousands]

Type of industry

Number

of industries

Production

workers

Change in production workers

1957 1961 Total

Associated

with unit

man-hours

Associated

with

output

A. Industries with decrease in production

workers:

1. Decrease in unit man-hours

equaled or exceeded decrease in

employment 64 3,939 3,619 —320 —320 

2. Decrease in unit man-hours was

less than decrease in employment 60 3,130 2,452 —678 —288 —390

3. Increase in unit man-hours _ 17 446 367 —79 —79

Subtotal 141 7,515 6,438 —1,077 —608 —469

B. Industries with increase in production

workers:

1. Unit man-hours decreased 45 1,290 1,360 70 

2. Unit man-hours increased 18 788 859 71 

Subtotal 63 2,078 2,219 141 

Total—Sample industries__ 204 9,593 8,657 —936 —608 —469

Total, all manufacturing 12,842 11,748 —1,094 —747 —576

Decrease in employment 2 10,060 8,737 —1,323 —747 —576

Increase in employment 2 2,782 3,011 229 

I Based on census employment data.

2 Estimated from sample.
TABLE 42.-Indexes of output per man-hour and related data, 1947-62 (man-hour estimates based primarily on establishment data)

[1957-59=1001

Item 1947 1948 1949 1950 1951 1952

84. 7

69. 9

1953 1954 1955 1956 1957 1958 1959

103. 2

102. 8

1960

105. 2

109.3

1961 1962

Output per man-hour:

Total private 

Agriculture 

70.9

50. 2

73. 4

59. 6

75. 5

56. 8

80. 9

64. 7

82. 9

64.0

88. 2

77. 8

89. 8

83. 4

93. 8

86. 4

93. 9

88.3

97. 2

94. 2

99. 6

103.0

108. 7

115. 8

112.9

119. 7 Nonagricultural industries 

Manufacturing:

76. 3 77. 9 80. 8 85. 1 86. 5 87. 6 90.0 91. 4 95. 3 94. 9 97. 6 99. 4 103. 0 104. 6 107. 6 111. 7

All persons 74. 8 76. 8 78. 5 83. 7 85. 2 86. 4 90. 6 89. 8 96. 0 97. 1 97. 3 99. 1 103. 7 105. 9 110.3 115.0 Production workers 

Nonmanufacturing 

Output: 1

Total private 

Agriculture 

Nonagricultural industries 

Manufacturing 

Nonmanufacturing _,- Employment:

Total private 

Agriculture 

Nonagricultural industries 

Manufacturing:

All persons 

67.8

76. 8

68. 4

81. 2

67. 7

71. 1

65. 9

90. 9

145.0

85. 2

93.8

70. 3

78. 2

71. 2

92. 8

70. 0

72. 6

68. 7

92. 1

140. 4

87.0

94.0

73.4

82. 1

70.8

88.0

69. 8

67. 6

71.0

90. 2

142. 1

84. 7

87. 2

77.3

85. 6

77.3

92. 8

76. 4

78.3

75. 5

91. 9

133. 5

87. 5

92.0

79. 1

86. 8

82.0

87.0

81. 7

85. 7

79. 6

95. 2

125.3

92. 0

98.9

81.4

87. 9

84. 4

90. 4

84. 1

88. 4

81. 9

96. 2

120. 5

93. 6

100.4

85.6

89.0

88. 6

93. 7

88. 3

97. 3

83. 7

97. 6

110.8

96. 1

105.8

86.0

92. 0

87. 2

97. 6

86. 6

88. 1

85. 8

95. 2

109.6

93. 7

98. 4

92. 1

94. 6

95.0

102. 9

94. 5

99. 5

92. 0

98. 9

113. 2

97. 4

101.8

94. 2

93. 4

97.0

100. 5

96. 8

102. 1

94. 1

101. 5

110. 5

100. 5

103.9

96.0

97. 6

98.9

99. 0

98. 9

100. 7

98.0

101.3

104. 5

101. 0

103.5

100.3

99. 8

97.0

100. 5

96. 8

94. 2

98. 1

97. 9

97. 9

97. 9

96. 2

103.8

102. 6

104. 1

100.0

104. 3

105. 0

103. 9

100. 8

97.6

101. 1

100.3

107.3

104.0

106.8

104. 8

106. 9

107. 1

106. 8

101. 9

95.6

102. 6

101. 2

113.0

106. 7

108.6

104.3

108. 8

108. 6

109.0

101.0

91.2

102. 1

98.4

117.3

110. 1

115.3

105. 3

115. 9

118. 2

114. 8

102. 9

87.9

104. 5

101.6 Production workers 

Nonmanufacturing 

Man-hours:

Total private 

Agriculture 

Nonagricultural industries 

Manufacturing:

All persons 

103. 2

81.4

96. 5

161.8

88. 7

' 95. 1'

102. 6

83.9

97. 0

155.8

89. 9

94. 5

93. 7

83.6

93. 8

154.8

86. 4

86. 1

99. 5

85.5

95. 6

143.4

89. 8

93. 5

106. 2

89.0

98. 9

136.0

94. 4

100. 6

106. 1

90.6

99. 6

129.4

96. 0

102. 3

111. 7

91.9

100. 5

120.5

98. 1

107. 4

10/. 8 91.6

97. 1

117.0

94. 7

98. 1

105. 6

95.5

101. 3

119. 1

99. 2

103.6

106. 8

99.0

103.3

113.8

102. 0

105. 2

104. 8

99.9

101. 7

105.1

101. 3

103. 5

95. 3

98.7

97. 4

97.6

97. 4

95. 1

99.9

101.4

100. 9

97.3

101. 3

101. 3

100.0

103.2

101. 5

95.9

102. 2

101. 1

96.0

103.7

99. 9

90.1

101. 1

98. 5

99. 3

105.7

102. 1

88.0

103. 8

102. 8 Production workers 

Nonmanufacturing 

104. 8

85. 8

103. 2

87. 9

92. 1

86. 5

101.3

88. 2

108.4

91. 7

108.6

93. 2

113. 7

94.0

101.4

93.3

108.0

97. 3

108.4

100. 7

104.9

100. 4

93.9

98. 3

101. 2

101.3

99.8

102. 7

96. 1

102. 2

100.8

104. 3

1 Output refers to gross national product in 1954 dollars.
3510 NATION' S MANPOWER REVOLUTION

TABLE 43.-Year-to-year percent change in output per man-hour,1 total private

economy and major sectors, 1947-62

Period Total

private

Agriculture Manufacturing

Nonmanufacturing

1947-48 3.5 18.7 2.7 1.8

1948-49 2.9 -4.7 2.2 5.0

1949-50 7.2 13.9 6.6 4.3

1950-51 2.5 -1.1 1.8 1.4

1951-52 2.2 9.2 1.4 1.3

1952-53 4.1 11.3 4.9 1.3

1953-54 1.8 7.2 -.9 3.4

1954-55 4.5 3.6 6.9 2.8

1955-56 .1 2.2 1.1 -1.3

1956-57 3.5 6.7 .2 4.5

1957-58 2.5 9.3 1.8 2.3

1958-59 3.6 -.2 4.6 2.8

1959-60 1.9 6.3 2.1 1.4

1960-61 3.3 5.9 4.2 2.6

1961-62 3.9 3.4 4.3 3.2

1 Man-hour estimates based primarily on establishment data.

CHART 48.-INDEXES OF OUTPUT PER PERSON, TOTAL PRIVATE, AGRICULTURE, AND

NONAGRICULTURE, 1947-62. EMPLOYMENT ESTIMATE BASED PRIMARILY ON

LABOR FORCE DATA. ( 1947=100 )

Index

250

200

150

100

90 1 1 I

AGRICULTURE

TOTAL PRIVATE

x

/

NON AGRICULTURE

I 1 1 1 1 1 I

1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962
NATION'S MANPOWER REVOLUTION 3511

CHART 49.—INDExEs OF OUTPUT PER MAN-HOUR, TOTAL PRIVATE, AGRICULTURE,

NONAGRICULTURE, 1947-62. MAN-HOUR ESTIMATES BASED PRIMARILY ON EsTABLISHMENT DATA. (1947=100)

INDEX

250 

AGRICULTURE

150

100

90

TOTAL PRIVATE•

/ NONAGRICULTURE

I I I I I I I I I I I I 

1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962

CHART 50.—INDEXES OF OUTPUT PER MAN-HOUR, MANUFACTURING AND NONMANUFACTURING SECTORS OF THE NONAGRICULTURAL ECONOMY, 1947-62. MANHOUR ESTIMATES BASED PRIMARILY ON ESTABLISHMENT DATA. (1947=100)

INDEX

160

140

120

100

90

MANUFACTURING

NONMANUFACTURING

1 1 1 1 1 1 1 1 1 1 1 1 1

1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962