The Unemployables

From the Federal Reserve Board came the best economic omen yet: an announcement that industrial production had jumped 2.5% in April--the biggest increase since December 1959. But the great debate among U.S. economists last week dealt not with the prospects for recovery but with a problem that may well endure far beyond recovery: unemployment. Economists of the stripe of Federal Reserve Board Chairman William McChesney Martin Jr. believe that, for the first time in its history, the U.S. may be facing the emergence of several million "unemployables"--men and women who cannot get jobs even in good times.

The figures used make it difficult to assess just how much genuine unemployment exists. U.S. Labor Department statistics--which now place unemployment at 6.8% of the labor force--include among the jobless many people (such as teen-agers looking for part-time work and housewives seeking a job for the first time) who, in other countries, would not be listed as unemployed. When Sweden experimentally tried using U.S. measuring standards, the Swedish "unemployment" rate immediately quadrupled though the actual employment situation had not changed at all. Still, the very completeness of the U.S. figures makes them a valuable barometer for judging the who, why and where of joblessness.

The Big Surge. Some strong and disturbing trends are visible. The number of Americans who have been out of work for more than 15 weeks has grown faster than unemployment as a whole (see chart), and reached a postwar high of 2,128,000 in April. The number of people unemployed for at least half a year is rapidly approaching the August 1958 postwar high of 972,000.

Since 1953, more than a million jobs have disappeared in U.S. industry, and another million in agriculture. In such heavy-employment industries as automaking and steel, automation and technological improvements permit more production with fewer men. Other industries, such as mining, transportation and textiles, which once employed great numbers of workers, have fallen into a relentless, long-term decline. Employment has been growing in the service trades, in white-collar jobs, in finance, insurance, real estate and state and local government. But many who lost out in the factory have been unable or unwilling to make the switchover. The main groups caught in this "hard core" unemployment:

Workers under 24 have an unemployment rate that has remained about 12% for 13 consecutive quarters (v. a national average of 6.4% over that period). At least 30% of this group consists of youngsters who dropped out of high school.

Unskilled workers average an unemployment rate above 20%, and made up 56% of the long-term unemployed in April.

Negroes, though they are only 10% of the U.S. labor force, account for about 20% of all unemployment, and constituted 46% of the long-term unemployed in April.

Men over 45 make up more than half of all workers who have been unemployed for 15 weeks or more.

Workers in depressed areas account for 55% of all U.S. unemployment.

The Negative Outlook. The outlook for these groups, says the Labor Department, is "negative." Not all economists agree that it will be permanently negative. Dr. Arthur Burns, chairman of the Council of Economic Advisers in Eisenhower's first term, believes that "most of the unemployment is a cyclical problem," and expects unemployment to drop to 4% ("virtually full employment") within 15 to 18 months if the economy makes a good upturn. Kennedy's chief economic adviser, Dr. Walter Heller, agrees with Burns that the present high rate of unemployment is primarily a result of poor business--though, unlike Burns, he believes it will be necessary to use Government stimulants to get the economy growing fast enough to solve the unemployment problem.

The Federal Reserve Board's Martin disagrees with both Burns and Heller, believes that "there are forces at work that have produced another structural type of unemployment that already has proved to be indefinitely persistent, even in periods of unprecedented general prosperity." The man who knows most about the unemployment statistics, Labor Department Manpower Expert Seymour Wolfbein, feels that structural, or continued, unemployment is a growing threat--but that little can be done about it until the economy advances far enough to get the cyclically unemployed back to work. "You will still have structural unemployment," says Wolfbein, "but to try to lick the structural problem is a lot easier from a high level of business activity than from a low one."

No Longer Automatic. Even at a high level of business activity, warns Wolfbein, there will be limits to what can be done about the unemployables--except by the unemployables themselves. Government agencies and communities can retrain workers and try to attract new industry to depressed areas. But the unemployables must be willing to learn new skills and be ready to move to where the jobs are. And the nation's labor force in the 19603 will need more schooling than before to hold their own in the competition. "A job is no longer automatic," says Seymour Wolfbein. "Without preparation, a U.S. worker will have, increasingly, a hard time finding a job."

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