6
Estimates of Unemployment During the Last Four Years Author(s): Theodore J. Kreps Source: Journal of the American Statistical Association, Vol. 29, No. 185, Supplement: Proceedings of the American Statistical Journal (Mar., 1934), pp. 81-85 Published by: American Statistical Association Stable URL: http://www.jstor.org/stable/2277808 . Accessed: 14/06/2014 23:52 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. . American Statistical Association is collaborating with JSTOR to digitize, preserve and extend access to Journal of the American Statistical Association. http://www.jstor.org This content downloaded from 62.122.73.34 on Sat, 14 Jun 2014 23:52:34 PM All use subject to JSTOR Terms and Conditions

Supplement: Proceedings of the American Statistical Journal || Estimates of Unemployment During the Last Four Years

Embed Size (px)

Citation preview

Page 1: Supplement: Proceedings of the American Statistical Journal || Estimates of Unemployment During the Last Four Years

Estimates of Unemployment During the Last Four YearsAuthor(s): Theodore J. KrepsSource: Journal of the American Statistical Association, Vol. 29, No. 185, Supplement:Proceedings of the American Statistical Journal (Mar., 1934), pp. 81-85Published by: American Statistical AssociationStable URL: http://www.jstor.org/stable/2277808 .

Accessed: 14/06/2014 23:52

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].

.

American Statistical Association is collaborating with JSTOR to digitize, preserve and extend access to Journalof the American Statistical Association.

http://www.jstor.org

This content downloaded from 62.122.73.34 on Sat, 14 Jun 2014 23:52:34 PMAll use subject to JSTOR Terms and Conditions

Page 2: Supplement: Proceedings of the American Statistical Journal || Estimates of Unemployment During the Last Four Years

Proceedings 81

ESTIMATES OF UNEMPLOYMENT DURING THE LAST FOUR YEARS'

BY THEODORE J. KREPS

To estimate the number of unemployed by the survey method, as do Colonel L. P. Ayres 2 and the American Federation of Labor,3 requires not only an extremely careful and painstaking analysis, industry by in- dustry, of conditions all over the United States, but also an intimate and detailed knowledge thereof, such as can be possessed only by a govern- mental bureau or by the research department of a large bank or national labor organization. The independent investigator is tempted to experi- ment with short-cuts.

One such experiment is here presented (see Chart I). The funda- mental procedure was twofold: to find out how many still had jobs in a few selected industries and to subtract that number from, or apply that percentage to, different totals in order to get a minimum, a probable, and a maximum estimate of the amount of unemployment. In all the cal- culations no attempt was made to evaluate the unemployment within employment which comes into being when production schedules are staggered, or working weeks and working days shortened. Moreover, in all cases the number employed on the average in 1929 was used as the basis of comparison. This amounts to assuming that in 1929 no unem- ployment existed. Furthermore, it has been assumed throughout that 3,400,000 entrepreneurs, the probable number of those self-employed elsewhere than on the farm, were able to maintain their self-employment. Finally, there has been held constant the number of gainfully employed in agriculture, estimated in round numbers to be ten million.

The numbers employed in various industries were computed from the indexes given in the Monthly Labor Review adjusted to 1929 as the base year when necessary. In those few instances in which quotations for specific months were lacking, nominal figures were computed by straight line interpolation. The building industry presented special difficulties, inasmuch as only monthly percentage changes are published by the Bureau of Labor Statistics. Though the unemployment census of Jan- uary, 1931, covers only a few selected cities, it was assumed that the trend in building employment for those cities between April, 1930, and

1 Summary of a paper presented before the round table on unemployment. A reading of the article of Dr. Meredith B. Givens entitled "Employment During the Depression," Bulletin 47, National Bu- reau of Economic Research, June 30, 1933, suggested the idea that his annual figures could readily be obtained quarterly. For carrying out the idea, I am especially indebted to Mr. Walter A. Radius, a graduate student at Stanford University, who kindly consented to make the computations involved.

2 The Cleveland Trust Company, Business Bulletin, Vol. 15, No. 1, January, 1934. 8 The American Federationist, "How Many are Unemployed? " October, 1933, pp. 1-8.

This content downloaded from 62.122.73.34 on Sat, 14 Jun 2014 23:52:34 PMAll use subject to JSTOR Terms and Conditions

Page 3: Supplement: Proceedings of the American Statistical Journal || Estimates of Unemployment During the Last Four Years

82 American Statistical Association

January, 1931, when adjusted by the seasonal index given in the Fif- teenth Census Report on the Construction Industry, is representative of the building industry in all cities.

CHART I ESTIMATES OF THE NUMBER OF UNEMPLOYED IN THE UNITED STATES 1930-1933

Mi~lionfT7FiT I -1 T -- t I t I Miilion

15 1 15

14 - 14

2 12

7 7

6 LEGEND 6 A- Net number losing jobs in 17 selected

5 industries. 5 /.. - - { /',B - Unemployed gainful workers living in

4 .- > - ______ cities of 2500 or over. 4 C - Curve A plus new workers. D - Estimates of Colonel L. P. Ayres. 3 __ _ ,,E - Estimates of the American Federation 3

of Labor. 2 - F - Unemployment percentages applied to 2

all gainful workers except farmers and enterprisers.

O _, Li l_ I I , I , 0

l93:O 193! 1932 1933

Curve A represents the minimum of unemployment, namely, those who lost their jobs in the seventeen industries for which the Bureau of Labor Statistics obtains figures of employment. The total number employed in these industries was estimated from the 1930 Census of Occupations, the Censuses of Unemployment in 1930 and 1931, the Census of Manufactures, and the census reports upon particular indus- tries, including the Census of Distribution for the wholesale and retail trades. In many instances the occupations were perforce arbitrarily allocated. The average number employed in 1929 in the manufacturing and mechanical industries totalled 13,864,645 persons, in retail trade 3,833,581,in building construction 2,396,500, in wholesale trade 1,605,042, on steam railroads 1,597,726, in brokerage, insurance and real estate offices 1,390,663, in hotels and restaurants 1,269,337, in laundries 619,826, in telephone and telegraph offices 566,911, in bituminous coal mining 502,993, in power and light production 287,000, in crude petroleum pro-

This content downloaded from 62.122.73.34 on Sat, 14 Jun 2014 23:52:34 PMAll use subject to JSTOR Terms and Conditions

Page 4: Supplement: Proceedings of the American Statistical Journal || Estimates of Unemployment During the Last Four Years

Proceedings 83

duction 204,601, in anthracite coal mining 151,501, on electric railroads and motor buses 197,815, in metalliferous mining 100,455, in quarries 89,370, and in dyeing and cleaning 87,842. The grand total in the seven- teen industries is 28,765,800. To get the figures for the probable num- ber employed on the average in 1929 the census reports of April, 1930, were adjusted for the drop in employment as computed by Givens in the article already mentioned.

The assumptions underlying the calculations from which Curve A resulted are four-fold: (1) That all workers not gainfully occupied in the seventeen selected industries (about 20,000,000 or 40 per cent of the total) experienced no unemployment; (2) that all those who sought a job for the first time during the years 1930 to 1933 were able to find jobs; (3) that, on balance, none of those who lost jobs in the seventeen indus- tries were reemployed in other enterprises; (4) that the sample which the Bureau obtained in the several industries concerned, though it com- prised as a rule less than 15 per cent of the total engaged, was none the less a representative and adequate sample. The drop in employment represented in Curve A obviously underestimates the amount of unem- ployment for it shows only 1,850,000 unemployed in May, 1930, where the 1930 census of unemployment enumerated 2,429,000 Class A unem- ployed (out of a job, able to work, and looking for a job) and 758,000 Class B unemployed (having jobs but on lay-off without pay).

In Curve B the computed numbers employed for the seventeen selected industries were expressed as percentages (see Table I) of the total em- ployed in 1929, and the percentages applied to the number of gainful workers in cities of 2,500 or over in 1929. Increases in urban gainful workers since that time were computed and added. It is assumed (1) that in cities of 2,500 or under and in rural districts there occurred no net unemployment; (2) that the percentage of gainful workers residing in urban communities remained constant throughout the period, namely, 60.93 per cent, the figure of 1930; (3) that the index of employment in the selected industries represented fairly accurately the condition of the population in cities of 2,500 or over.

It is well known that the depression gave a considerable impetus to the trend of population movement into outlying districts 1 but no esti- mate is possible. It is probable, however, that such movement was distinctly smaller for unemployed residing in large cities than for those who were already familiar with agricultural or horticultural methods

1 In the decade.from 1920 to 1930 the rural non-farm (village) population increased from 20,047,377 to 23,662,710, i.e., from 19.0 per cent to 19.3 per cent of the total population. This "includes small manufacturing villages and trading centers, unincorporated suburban areas, mining settlements, etc., and a considerable number of families living in the open country but not on farms." Abstract of the Fifteenth Census of the United States, Washington, 1933, p. 18.

This content downloaded from 62.122.73.34 on Sat, 14 Jun 2014 23:52:34 PMAll use subject to JSTOR Terms and Conditions

Page 5: Supplement: Proceedings of the American Statistical Journal || Estimates of Unemployment During the Last Four Years

84 American Statistical A ssociation

and who were already living in small outlying tributary communities of less than 2,500 people. Whatever movement did take place from the larger centers was probably offset in part, if not altogether, by the well known movement of dispossessed farmers and migratory laborers in small communities to metropolitan centers.

Curve C merely adds to Curve A the total number of gainful workers

TABLE I GAINFUL WORKERS AND UNEMPLOYED

(In thousands)

Gainful workers Number unemployed

In seventeen selected

Quarter In al industries In Column Column Column Column Column Column occupa- urban A B c D E F tions Per cent centers

No. em- ployed

1st 1930 ........ 48753 92.8 29705 2062 2312 2370 3253 3565 2822 2nd 1930 ....... 48872 o 93.6 29778 1850 2149 2277 3381 3090 2679 3rd 1930..... . .. 48992 oo 89.6 29851 2991 3403 3538 4492 4101 4191 4th 1930 ....... 49112 e 87.5 29924 3587 4096 4254 5457 5364 5039

1st 1931 ........ 49210 o 80.8 29984 5521 6133 6286 7364 7345 7492 2nd 1931 ....... 49296 c 81.2 30036 5402 6067 6253 7119 6750 7434 3rd 1931 ........ 49383 l 78.2 30089 6262 7006 7200 8003 7357 8568 4th 1931 ....... 49470 75.9 30142 6932 7738 7957 9099 8699 9470

1st 1932 ........ 49554 ' 70.6 30193 8471 9353 9580 10500 10486 11426 2nd 1932 ....... 49637 n 66.7 30244 9593 10555 10785 11387 11470 1287? 3rd 1932... ...... 49720 c) 63.6 30294 10469 11521 11744 12460 12344 14030 Ath 1932 ........ 49802 % 65.9 30344 9797 10892 11154 12115 12008 13295

1st 1933 ........ 49902 61.9 30405 10953 12133 12410 13238 13294 14802 2nd 1933 ....... 50010 " 63 .1 30471 10610 11845 12175 13051 12896 14492 3rd 1933... 50118 ? 71.1 30537 8306 9550 9979 10654 10948 11794 Oct. 1933 ....... 50190 74.6 30581 7307 8561 9052 9744 10702 10647

Column A =net number losing jobs in selected industries. Column B =unemployed gainful workers living in cities of 2,500 or more. Column C =Column A plus new workers. Column D =estimates (Feb., May, Aug., Nov.) of Colonel L. P. Ayres. Column E =estimates (Feb., May, Aug., Nov.) of the American Federation of Labor. Column F =unemployment percentages applied to all gainful workers except farmers and enterprisers.

which would normally have come upon the market because of the in- crease in population. It assumes that the percentage of gainful workers to total population (39.77 per cent in 1930) remained unchanged. Al- lowances were made for net emigration, 127,000 in 1931 and 165,000 in 1932.1 It also assumes that, on balance, none of those who tried to get jobs for the first time secured one.

Curve D, Colonel Ayres' estimates, corresponds very closely with Curve E, the estimates of the American Federation of Labor.

Curve F obviously exaggerates the amount of unemployment. It as- 1 The estimates of increases in population up to 1933 were taken from P. K. Whelpton, " Popula-

tion," American Journal of Sociology, May, 1933, Vol. 38, No. 6, p. 826.

This content downloaded from 62.122.73.34 on Sat, 14 Jun 2014 23:52:34 PMAll use subject to JSTOR Terms and Conditions

Page 6: Supplement: Proceedings of the American Statistical Journal || Estimates of Unemployment During the Last Four Years

Proceedings 85

sumes that the employment on the farms remained constant (the in- crease in unpaid family labor offsetting the decrease in hired help) despite the fact that the net gain in farm population was 416,000 in 1930, 656,000 in 1931, and 1,001,000 in 1932, at the same time that the net movement from the city to the farm was 17,000 in 1930, 214,000 in 1931, and 533,000 in 1932.1 It also assumes that the employment for such proportion of the members of the professional and clerical groups as are not included in the seventeen selected industries approximated the aver- age shown by the indexes. This is again not true, inasmuch as the num- ber of municipal, state, and federal employees has not decreased very much. Even in the professions, among teachers and others, the amount of unemployment has been considerably less than among the unskilled workers.2

In all the computations it has been assumed that no unemployment existed in 1929. If that fact be borne in mind, and to mention a round number, a million be added to Curves B and C, their correspondence with the figures of Colonel Ayres and with those of the American Federa- tion of Labor becomes noteworthy. In brief, if the proper parent popu- lation be selected, the indexes of employment now being compiled by the Bureau of Labor Statistics furnish a reasonable basis of estimate of the amount of unemployment. There is reason to believe that a short-cut method might fairly readily be devised and controlled which would afford, even on the basis of the meager data now available, reasonably prompt and reliable estimates of unemployment in the United States.

1 Bureau of Agricultural Economics, United States Department of Agriculture, The Agricultural Situation, May 1, 1933, Vol. 17, No. 5, p. 4.

2 See especially M. H. Hogg, "Ebb-tide of Employment," Mid-monthly Survey, New York State Department of Labor, August, 1933. For May-June, 1933, she shows in her survey of New Haven that only 20.5 per cent of the professional male workers were unemployed as opposed to 44.5 per cent of the unskilled workers.

This content downloaded from 62.122.73.34 on Sat, 14 Jun 2014 23:52:34 PMAll use subject to JSTOR Terms and Conditions