Montana labor news., 1949-12-29
1850. TEST YEAR FOR FREE ENTERPRISE

WIZ. look forward to 1850 with much concern over
the increase in unemployment which seems sure 'o oeveop
pro.pects for l95O's first six months are fairly bright but a
slackenins of industrial activity at least equal to that OF last
summer seems likely in the second halt year VIII our ifee
enterprise system meet this test without turning 10 yer"
for more spending? m
To reach our national gcI OF maintaining fl prooue'on
and employment. demand for industry $ products M
or.... enough each wear to create jobs for all new workers
;o;n;ro the labor force and for those laid oft by labor saving
devices. In l947 and 1913 (and during the war; demand
was ample to create these Jobs and we q a aun .h ~ .no total
IS all products and services turned out by all industries al
maximum employment levels But in l94'9. tor the FIRST tune
in 8 wears demand fell short, production dropped Deo" nv VII
.mnhvment' levels and unemployment rose by - million
wears averaged. Particularly serious is the expected dechne
in 1850 in business purchases OF new plant ana qupm naIs
~ shortages This decline could mean the loss OF some ouo'
600 Jobs Such a job loss, together with the expected decline
of | s Der cent in farmers income next year, would reduce
consumer purchases. Partly offseting these declines IS an
increase in spending by local, state and federal governments
for school buildings hospitals, housing roads military eqop,
ment. But the total buying power now IN prospect Q Wv
!. only 1888 billions billion less than IN '949.
Although an accurate forecast Of what will happen IN '9oo
i. Of course impossible, we believe an outline OF what now
s--m. likely will be helpful not only to workers but to all
groups. For action can be taken TO improve nc 'ua'un
Next year our civilian labor force-that is, the total number
Of persons seeking work in usA-w1l average about o. M n.
more than the 2. million (average) in '947 and '94o, then
Jobs for 81 million will be needed. Sixty one million persons
at work in USA would create a gross national product worth
about S276 billion; but our calculations show that actual de-
mand for goods, backed by purchasing power, is not likely
to exceed some 1888 billion in 1850. Employment IS there
fore likely to be below I949 by some 100000 on the average,
and with 900, 600 more persons seeking work, unemployment
in 1850 would average ], 700, 900 above l949, and ) million
above lo47 and I948. That means average unemployment
Of 5 million persons. During industrial dull seasons, unem-
plovment would rise considerably above 5 million, the figure
generally considered the danger point.
Such a prospect calls for serious consideration and planning
For now is the time to take preventive action. 50 It IS worth
while to examine the outlook for $50 in more DEATH.
Industry has snapped back briskly from the recession OF las
summer. Production at the yearend is close to that OF las
April May, and is expected to continue at about this level fo
several months. Demand for automobiles is still strong, ano
the building construction industry looks forward to another
peak wear in 1850. equal to l049. Textile mills are booked
10 capacity for next spring and higher output of shoes is ex
pected. The market for consumer products will be bolsteree
in the first half year by payments OF more than - billion tt
veterans in insurance refunds and bonuses. If they spend abou
half this amount and save the rest, their buying power viii
offset the decline in farmers income. Since workers total in
come will be at least as high as in l949, consumer buying il
the first half year should continue close to the l949 level
Higher government spending will about offset the decline il
business purchases OF new plant and equipment in the flrs
half year. Therefore, total business volume should about equa
lo4o through May or June of 1850. But buying and bushes
volume no more than equal to last year will not be enougl
to expand production and create jobs for new workers, 81
unemployment in the first half year will edge upward, ex
eeeding l94o by perhaps a million.
Lower prices Of clothing and some housefurnishings ar
forecast for next spring. with a few declines IS much as II
per cent. Food prices will probably move slowly downward
Even though rents will rise and prices Of some other items suc
as tires, may increase a little. the consumer price index as
whole is likely to be at least or z per cent lower by mex
Iune. Such a downward readjustment Of prices is a thoroughly
wholesome development and will increase the buying powe
Of workers and other consumers.