other half of the workers. For them a job is an affair of a few weeks or a few months. Due to their own unfitness they are fired, or due to their discontent at conditions within the plant the job becomes irksome almost as soon as it is taken. This half of the laboring population is on the march from plant to plant a large share of the time. For them. employment is an unstable, uncertain, fickle, temporary affiliation. The cost of labor turnover is severe. The cost to the employer in terms of dollars and cents ranges from $25 to $200 or more per employe For employees the loss of earnings during unemployment, the expense and difficulty of obtaining new jobs, the low wages while learning a new job, the greater exposure to accident in unfamiliar work, the cost of moving the worker's family, the loss of skill by the shift of occupation and the demoralization and discouragement from idleness are tremendous. Attempts to reduce labor turnover have been frequent during the last decade. It was formerly supposed that the ready mobility of labor was thoroughly useful because it evened up the supply and demand of workers in various communities and served to adjust the labor market to business requirements the country over. In recent years, however, this mobility of labor has come to be looked upon as an undesirable burden to both the employer and the employee. At first, employers sought to reduce turnover by special devices contrived almost exclusively with reference to the turnover problem. Gradually this viewpoint has been abandoned and in its place has arisen the belief that turnover is an index of the whole policy of labor management of the corporation. No single trick or device has magic powers to reduce turnover. All phases of the corporation policy need to be placed upon a sound footing, and thereafter turnover will take care of itself. There are certain phases of corporation policy which have more importance in reducing turnover than others. To quote Slichter, "The foremost important features of a job to the average factory workman are: "1. The wages. "2. Its steadiness. "3. Its psychical and nervous demands upon him. "4. The hours. "As these four overshadow all other features of the job in importance to the workman, making the work attractive in these four respects must necessarily form the foundation of attempts to reduce the turnover. . . . Men will not remain at work because of incidental attractions when matters of fundamental importance are unsatisfactory." 2 "2 Under favorable conditions turnover can be reduced, so most authorities agree, to approximately a 20 per cent basis. 2 The Turnover of Factory Labor, p. 251. 3 Lescohier, The Labor Market, p. 116. The unsteadiness of the job has the most intimate bearing upon industrial morale and upon the degree of loyalty existing between the employer and the employee. Unsteadiness of employment operates as a direct cause of disloyalty to the company. The worker feels that wages, hours, and working conditions are so unsatisfactory that he is ready at any moment to leave the job. If he does not leave on his own accord a foreman or superintendent may fire him for reasons good or bad. Under these conditions he becomes the victim of a weak, and often vicious industrial morale. It is next to impossible to feel loyal to the company because he receives too many indications that the employer feels no sense of loyalty to him. The employer stands ready to close down his factory when business conditions are poor regardless of the discomfiture among his workers, and with that understanding in the worker's mind, it is but natural for him to be disaffected and resentful. Among a very large group of employers, this state of uncertainty and unsteadiness of employment is looked upon as a valuable weapon over the employees. If the worker can be kept in a state of fear and dread of being fired, it is thought that he will be spurred to efficiency and obedience. The right of firing, with loss of pay, is supposed to be essential in order that men may have an incentive to work efficiently. The knowledge that a line of applicants is standing at the factory gate eagerly asking for jobs is conceived as an intimidating force. The discipline of fear is hung over the workers' heads. The attempt to appeal to the emotions of fear and to establish industrial discipline upon the basis of worry, anxiety, privation and distress is, however, definitely repudiated by the more progressive business men. Fear may drive men to work, but work done under such compulsion has neither the spirit nor the efficiency which is possible of realization when other motives are brought out. As Cooley remarks, "Fear is a poor motive, because it does not evoke those energies which are bound up with ambition, sympathy, social imagination and hope." To quote F. J. Miller in a presidential address to the American Society of Mechanical Engineers, "The old driver method of management will no longer do. . . . The workers of every country have acquired a new status. Realizing the great difference between a body of employees all enthusiastically cooperating, and a body of employees rendering only such service as they think necessary to hold their jobs, these men [engineers] are giving this problem their best attention." The fear discipline holds the mass of workers to a low margin of safety. At any minute they are in danger of losing the opportunity to work, and with that they lose the opportunity to livelihood and security. This condition represents what has been called "a pain and deficit economy," that is, an economy in which the worker is always on the verge of unemployment and privation. The never-ending uncertainty under the fear régime brings a heavy human cost. It means that workers have at painfully frequent intervals to "turn to new occupations, form new habits, and think new thoughts." As Cooley says, "The principle that human character deteriorates under irregular and uncertain employment is an old one and, I believe, undisputed." 80 PER CENT OF TOTAL BASED UPON FIRST QUARTER OF 1920 8 8 RELATIVE CHANGES IN THE NUMBER OF EMPLOYEES ON PAY ROLLS In the job is centered all that means most in the life of the working man. It is his opportunity to be a useful member of society. It is his opportunity to develop the capacities which make him a human being. For him it contains the means to all that life holds worth while. It is, 4 Cooley, Social Process, p. 184. in short, for the worker the very life of life. The fear discipline which is associated with unrestricted right to hire and fire and with irresponsible power to intimidate and coerce men by threats of unemployment strikes at the heart of the worker's life. Progressive employers have discovered that the fear discipline can be moderated with immense human gain to the workers and with a corresponding benefit to the employers in terms of productive efficiency and sound industrial morale. Fluctuations in Unemployment.-Even in good times, a considerable percentage of industrial workers is unemployed. Approximately 5 per cent of the labor supply is unemployed under conditions of prosperity. In periods of depression, upwards of 20 per cent is unemployed. Taking the average of good and bad years, probably 10 per cent of labor is constantly out of work. In the United States, this means that more than one million workers are unemployed in good times and more than four million workers unemployed in bad times. A certain normal minimum of unemployment is characteristic of modern industry. It is due to the process of making adjustments and transitions, and persists even during the era of prosperity. The cyclical fluctuations in employment are indicated by the diagram on page 421.6 Intermingled with the cyclical fluctuations of unemployment are seasonal fluctuations. In such industries as coal mining, building, or millinery, the employment at one portion of the year may be only onethird or one-half of the employment at another portion. Seasonal fluctuation in railway employment is shown in the following diagram: " EMPLOYMENT Based on 3 year average of years 1919 to 1921 inclusive (Average month = = 100) 7 125 120 115 110 105 125 120 115 110 105 100 95 90 85 80 80 75 75 Such seasonal fluctuations are a heavy burden upon labor and upon business. Although long looked upon as inevitable, they have more recently come to be viewed as in part remediable. Seasonal employment has been greatly curtailed by many individual factories through the adoption of special policies. Such policies include the spreading of 5 For data, see W. I. King, Employment, Hours, and Earnings in Prosperity and Depression, p. 143; Shelby M. Harrison, Public Employment Offices, pp. 8-9; The National Industrial Conference Board, The Unemployment Problem, Research Report No. 43, p. 34; W. T. Layton and others, Is Unemployment Inevitable?, pp. 6-7. 6 W. I. King, Employment, Hours, and Earnings in Prosperity and Depression, 7 W. C. Mitchell and others, Business Cycles and Unemployment, p. 214. orders over the year more evenly, manufacturing to stock, and diversification of the products of the concern. A technique for leveling out the seasonal extremes has been developed, and is available for the use of those business concerns desirous of sharing in the benefits of stabilization. The most severe form of unemployment is that due to cyclical fluctuations. The problem of cyclical employment may be approached from various angles. First, it may be approached from the angle of general control of the business cycle. This involves control of finance and production. If finance and production are stabilized, employment will be likewise stabilized as an automatic result. Prevention of cyclical undulations is a primary necessity.8 Second, the problem may be approached from the angle of unemployment relief. The forms of relief are charity, doles, and unemployment insurance. By far the most desirable plan of relief is insurance. Unemployment insurance may be financed by the employees, or by the employers, or by both jointly, or by the government. Joint responsibility by employer and employee seems desirable. Financial responsibility of the employer acts as an incentive to prevent unemployment from occurring in the first place. Responsibility of the employee means that labor sets aside a reserve in time of good income to be used as an emergency resource in time of poor income. Unless insurance is available, unemployment imposes a cruel and heavy burden upon the mass of workers. Third, cyclical unemployment may be approached from the standpoint of eliminating idleness. The planning of construction, both by government and by private industry, may be timed with a view to taking up the slack in employment when dull times appear. The longrange planning of construction work tends to level out the peaks and the valleys of employment. Fourth, the problem may be approached from the angle of helping workers to find jobs. A certain amount of work is always waiting for the right laborers, and a certain number of laborers are always looking for jobs. Some unemployment is due to inability to bring job and man together. This task is the function of employment offices. There are strong reasons why public employment offices should be maintained by state and federal governments, supplemented by private offices. Four main lines of effort, are, then, called for by the problem of cyclical unemployment. These are: prevention of cyclical fluctuations of business, relief of unemployment once it has occurred, elimination of unemployment by long-range planning of public and private construction, and aiding workers to find jobs by adequate employment office facilities. Hours of Work.-The hours of work raise four important economic problems. These may be enumerated as follows: 1. The effect on productive efficiency of labor. 2. The effect on wages. 8 See detailed discussion in later chapters on the business cycle. |