GENERAL ARTICLES

WANTED 2,000,000 JOBS

Everyone agrees we must have "full employment"to win the peace . . . Here's a blunt analysis of what we have to do to get it

BLAIR FRASER March 15 1944
GENERAL ARTICLES

WANTED 2,000,000 JOBS

Everyone agrees we must have "full employment"to win the peace . . . Here's a blunt analysis of what we have to do to get it

BLAIR FRASER March 15 1944

WANTED 2,000,000 JOBS

Everyone agrees we must have "full employment"to win the peace . . . Here's a blunt analysis of what we have to do to get it

BLAIR FRASER

TWO MILLION Canadians have a worry in their hearts today—the same worry: “What’s going

to happen to me after the war?”

Nearly 800,000 are in the armed services, fighting for their country and wondering what their country is going to do for them. They’ll all need jobs.

Another 1,200,000 are in war industry and war government jobs, jobs that didn’t exist before September, 1939, and may not survive the peace.

About half of these war workers, or 600,000, will have to have brand-new jobs created for them. They’re making things that no peacetime economy, prosperous or not, would have any use for. Some 275,000 are making land armaments—guns, tanks, armored vehicles, shells, electrical and radio equipment for the complex weapons of modern war. Another 225,000 build ships and planes. Maybe we’ll still have an aircraft and a shipbuilding industry after the war, but even optimists know they won’t employ more than 10% of their present staffs, if that. Add at least 100,000 who are producing such things as steel, where output has doubled; aluminum, where it’s multiplied by 10; chemicals, where four times as many are employed as in 1939.

For the remaining 600,000 we shall have to provide not necessarily new jobs, but a new and unprecedented peacetime demand for what they’re producing. They represent an estimate of “war content” in such industries as transport, mining, public utilities, textiles and clothing, foodstuffs and so on.

If we could find markets at home or abroad, the goods and services these workers are making would still be wanted. The 50,000 “war” workers in textiles and apparel could make sack suits instead of battledress. The 25,000 in food processing could make meals instead of rations. But by any peacetime precedent these 600,000 men and women are making things we can’t sell.

On paper the serviceman’s problem is the easiest. Of 350,000 men who enlisted in the first three years,

85%, or 271,399, left jobs. Nearly half say their old job is promised to them when they get back. Of the rest a good many are protected by the Civil Employment Act, which gives a serviceman legal claim on the job he held before war.

But in practice many servicemen will be hard to place. One Ottawa civil service department, for instance, had a bright young lad who in 1939 was a grade one stenographer earning $60 a month. He joined up in the first weeks of war, and went overseas with the first division, secure in the knowledge that he could claim his job when he got back.

Last month his old department head got a letter which went something like this: “I don’t know just what to do after the war. I’ve done pretty well in the Army. I’m a major now, and I’m married and have two children. I’m afraid I couldn’t live on the salary my old job used to pay.”

There must be thousands of such lads who left lowpay jobs five years ago and meanwhile have acquired families on the strength of an officer’s $5 to $12 a day plus allowances. Some, the lucky ones, have also acquired skills that will raise their peacetime earning power. But what’s going to happen to the rest?

Anyway even if they were all placed in their old jobs, or a suitably senior equivalent, we’re no farther ahead with our broad problem. We’ll still have to find jobs for the civilians these ex-servicemen displace. Our goal of “two million jobs” hasn’t shrunk.

And that thought may remind us, too, that even the “two million” are not the whole of our problem. What of the three millions working at “nonwar” jobs in a war boom? Is their employment safe? They don’t know. Nobody knows.

You hear a lot about the “abnormal” employment of today, the married women in industry, the older men who have put off retiring until after the war. Some people seem to think these are so numerous that the returning soldiers can just take their jobs and we’ll come out even.

This is a pipe dream. In January of last year Canada’s total labor force, both male and female, was 5,147,000, or 59% of the 8,725,000 people 14 and over. According to competent statisticians we should have a labor force in 1946 of 4,903,000 a mere 244,000 less than the war-swollen total of 1943.

Women in industry? There were a lot of them last year, 1,172,000 all told. But statisticians think only a net 120,000 will stop work. This would mean 1,052,000 women working or anxious to work in 1946, against the 846,000 employed at the time of the 1941 census.

Older men? There were 212,000 over 65 years of age at work in 1943. Retirement will account for a great number—but Canada’s population is growing older, proportionately, every year. By 1946 wo shall have 42,000 more men in the 65 and up group than we had in 1943. So although a higher percentage of these will have stopped work, the actual number in the labor force will not have shrunk at all. Instead it will have risen by 1,000 men.

And these estimates make full allowance for a continuance of the trend toward earlier retirement, and of the trend toward longer schooling for youth. They also take grim account of probable battle casualties. Of our 800,000 service men and women, it is assumed only about 715,000 will come back alive and able-bodied.

What’s it add up to? Roughly: five million jobs— two million “war” workers, three million “nonwar,” all of whom have to be kept working. How are we going to do it?

To that question this article has no answer. All it tries to do is define the problem, find out how big it is. Everybody’s talking these days about “full employment.” All the political Parties claim they can provide it. Well, that’s what “full employment” means—five million jobs.

Before trying to figure out how they are to be created or maintained, we’d best have some idea of

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how those five million workers would be distributed, how many people would be doing what. In the light of past experience, competent statisticians believe that full employment of the 1946 labor force would break down something like this:

Nearly three of the five million will be supplying goods and services to the Canadian consumer.

Exports, including farm products, will absorb over half a million, 602,000 to be exact.

Heavy industry—forest products, mining, “producer goods” manufacturing—another 600,000.

“Government and allied,” including not only civil service but teachers, public health doctors, public utility workers and the armed services,

633.000.

Unemployed, 250,000. Even with “full employment” there will be seasonal workers, men changing jobs, youngsters looking for their first job and so on.

Those figures, of course, are just informed guesswork. They’re based on past experience and on the assumption (which may prove wrong) that the employment patterns of the future will be substantially unchanged from those of the past. The year 1946 is chosen more or less at random, mainly because it’s the halfway mark between censuses and therefore population estimates are easier to calculate. Except for population, the choice of year means nothing —“1946” is merely a typical postwar year, with the main task of demobilization and industrial reconversion complete.

Bearing all that in mind, we can still make some interesting observations. If the “1946” estimates are compared to actual figures for 1941, the last census year, the comparison shows that “full employment” means an increase over 1941 in all fields except manufacturing and the armed forces.

It puts 37,000 more in nonmilitary “government and allied” than in 1941, when the war bureaucracy was already considerable.

It puts 63,000 more in general services—professions, business services, recreational, etc., including 22,000 more domestic servants.

It puts another 20,000 in transport and communication, another 26,000 in trade and finance. Retail trade gains most, up 15,000.

Biggest jump of all is on the farms, where 197,000 more men are assumed to be employed in “1946” than in 1941—though that would still be 200,000 fewer than the billion and a half on farms in 1939.

Only in manufacturing, of all civilian occupations, is a decrease anticipated, and there the drop is guessed at only

60.000.

Construction, a key industry for all “rehabilitation” plans, is credited with an increase of only 12,000 men, though

it’s admitted that this would be a highly flexible figure. But even addition of 12,000 assumed a 10% increase in construction activity over that of 1941, which itself was “considerably higher” than for any previous year in our history. People who think they can employ the whole postwar surplus with “construction projects” will have to figure on a lot of building.

Roughly, then, that’s how our working force may be expected to break down, if fully employed, with a population as of 1946. It means a bigger labor force than we’ve ever had in peacetime, a quarter of a million more than we had in war-busy 1941, and only 200,000 below the war-swollen total of 1943.

It also means the highest national income we’ve ever had in peacetime— about 6)4 billions if all those people were working at wage levels a little higher than 1941, a little lower than they are now. (This, of course, is just an assumption.) That 634 billions would mean cash paid out to individuals; it’s a billion and a quarter less than the total we’re all earning this year—$7,470,000,000—but it’s $400 millions ahead of what we earned in 1941, and nearly two billions more than the 1935-1939 average.

Incidentally the relation between “full employment” and national income is figured out here with a double “if.” Employment is distributed as it would be if we had a national income of 634 billions. And we’d have a national income of 634 billions if we had this sort of full employment. Sounds like reasoning in a circle: If we had some eggs and ham, we could have some ham and eggs.

However, it’s not as bad as it looks. The circle is open at both ends—steps to increase national income would raise employment; steps to raise employment would increase national income. The problem will need to be tackled from both sides at once.

There’s another thing worth noting about this survey. It breaks down the working force into three groups that behave very differently in relation to national income as a whole.

Group I, services and home supplies, appears to depend on the national income level for its activity and prosperity. If something happens to raise the national income—a war boom, for instance, or a New Deal pump priming —activity in this group seems to follow more or less automatically. And this group employs 60% of our whole working force, or three million people at “1946” full employment.

Group II, exports and heavy industries, tends to lead national income. Records and graphs show that a rise in export or heavy industry activity precedes the lift in national income.

Group III, “government and allied,” is independent of purely economic factors, rises and falls as a result of government policy.

Some economists, notably Lord Keynes, conclude that Group II is the key to the economic structure,

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that national income depends on this | group. They think the way to full ! employment lies in maintaining activ¡ it y in the “active” industries of Group 11, and the “passive” industries of Group 1 will look after themselves.

This may seem nonsense, but by the I way things look now it’s a safe bet ! that the Keynes theory is going to have j considerable influence on British, American and Canadian postwar plans.

However, at the moment the theory is little more than a set of smoke rings in any country. And for Canada there is a set of special problems that will give us trouble whether the theory works or not.

For instance that “full employment” picture assumes not only a higher national income than we’ve ever had in peacetime, but something even more Utopian. It assumes a national economy that’s all in one piece—one even fabric from coast to coast. Nothing, alas, could be farther from the truth. Our economy is a hodgepodge of disproportionate chunks, each with a headache all its own.

On both coasts, for example, we have industries which have been profitable in wartime, when production means everything and cost nothing. But they have never been able to hold their own in the cost competition of peace. They have needed government blood transfusions to keep them alive.

Of Nova Scotia’s coal industry, the Turgeon parliamentary committee on reconstruction reported to the House: “We are convinced that after the war (it) will not be able to exist without assistance.” Frank Neate, fuel expert of the WPTB, told the Turgeon Committee last year that West Virginia coal could be delivered in Boston for less than Cape Breton coal could be loaded on a ship in Sydney Harbor.

British Columbia has her war-born aircraft and shipbuilding industries to worry about. Even with the advantage we derive from the exchange rate and from our price-wage ceiling, our west coast planes and ships are said to show a high production cost. Whether they can compete after the war is problematic.

These coastal industries are perhaps our sorest problem, but they are also our smallest. Far bigger, in numbers and in basic importance to our economic life, are the great war industries of central Canada, stretching roughly from Sorel, Que., to Windsor, Ont.

Here is the heart of the reconversion problem. Here are all the 25,000 aluminum workers, who numbered only 8,000 before the war. Here are the majority of 25,000 steelworkers, where there used to be only 12,000. Here are 92% of chemical workers, of whom there are now 80,000-odd instead of about 20,000. An enormous percentage of the quarter million now producing guns, tanks, shells and other arms sire centred in this Quebec-Ontario belt. These are the men and women for whom other jobs— -completely new and different jobs—will have to be found.

A black picture? Well, it has its bright side, too.

Don’t forget Canada has made tremendous, magnificent strides in this war. We used to be an industrial country of the “assembly plant” sort. Now we can stand on our own feet. The automobile companies have found, somewhat to their own surprise, that with a production schedule stepped up to 200,000 units or more a year Canadian auto plants can hold their own with any competitor below the border. Supply industries, too, like machine tools, have cut costs, increased efficiency. They believe they can meet anyone on equal terms now.

Even our “high-cost” industries, or

at least some of them, are not in the bad position they used to be. American attempts to control inflation have had less success than ours. Their higher wages are offset, or more than offset, by sky-high prices. It’s not yet certain just where the postwar stabilization will leave American costs as compared with Canadian. We may find ourselves ahead, in lines that used to be weak sisters.

On the farms the record has been equally startling. With fewer men Canadian farms have produced half as much again as in the years before the war. Pork production has been multiplied 2]/¿ times, beef has gone up about 50%. Total meat production has approximately doubled.

In this increase the great agricultural plant in the Middle West has played a vital role. The “wheat belt” is an all-wheat belt no longer. Alberta led all provinces in hog production in 1942, surpassing even Ontario, and Saskatchewan was not far behind. The “mixed farming” that eastern wiseacres used to recommend for depression - stricken prairie farmers has come, perhaps to stay.

Then Canada has a well-trained labor force, better trained than it has ever been. Not only the million-odd in war industry but the serviceman, too, has acquired new skills in this war. Our infantry, which in 1914-18 had only to know how to march, shoot and die, must now be composed of a number of mechanics, with a higher percentage in armored units. Thirty-five per cent of a modern Army must be skilled in some trade or other. Air Force ground crews need skill in similar or higher percentages, and the Navy is a training ground for numerous occupations.

So we enter the postwar period with new factories, new machines, new techniques and new skills. We have the plants, the materials and the trained men to hold our own as a nation in an industrialized world.

But—and it’s a big “but”—that won’t automatically solve the problems of peace. The difficulty ahead will not be production but disposal.

Said one Ottawa man, in a position to know what he’s talking about:

“This talk about ‘if we can do it in war we can do it in peace’ may be true in one sense, but in another sense it’s hokum. It’s misleading. It assumes that the problems of war and of peace are identical. They’re precisely opposite, in fact.

“In war our problem was to produce as much, as fast and as well as possible. Cost was irrelevant. Market was unlimited. All we had to do was make the goods.

“We did that, magnificently. But it hasn’t taken us any nearer solution of the major postwar problem: the old problem of the thirties, distribution. If anything it’s made it worse. We are producing more than we ever produced before, with 800,000 potential workers removed from the industrial picture entirely. How can we find fruitful employment for them, too, when they come back?

“I don’t say it can’t be done. In fact it must be done. But anyone who thinks we’ve already found out how to do it, that our war experience has made the peacetime problem a cinch, is just kidding himself.”

You hear a lot of talk about the “deferred demand” of the war years, but some of the best-informed men in Ottawa put little faith in it. Cold figures, they say, show that in most lines demand hasn’t been deferred at all. Automobiles, refrigerators, other such “consumer durable goods” are down, of course, because none are available. But in all other civilian

goods and services, consumption has increased sharply since the war.

Food consumption, rationing and all, is up about 10% among Canadian civilians. Clothing consumption is up far more—price changes make the exact proportions hard to fix, but Ottawa officials judge from retail sale totals that, even allowing for price increases, consumption of clothes and shoes was 40% higher in 1943 than in 1939.

All told, according to the best estimates I could get in Ottawa, civilian consumption of goods increased from Z]/2 billions in 1938 to more than four billions in 1943, and that’s after adjustment is made for price changes.

There’ll be a postwar demand for automobiles, refrigerators, washing machines, bathtubs and houses. But “need” and “demand” aren’t necessarily the same thing. We had a housing shortage all through the thirties, when the construction industry was idle. Workless men can’t buy washing machines and refrigerators. Most reliable of the postwar markets, in the opinion of Ottawa experts, will be the automobile. But even now, at its war peak, the auto industry offers only 45,000 jobs. At its peacetime top in 1939 it employed only 20,000 Canadians.

Basically, Canada is still an exporting country—in some fields, such as aluminum, more so than ever before. So our problem of “Tuil employment” becomes the problem of world markets and world trade. Canada is hard at work on that problem today, taking an active and even a leading part in efforts to solve it.

Some of the Canadian officials who have most to do with that effort are actually afraid lest “full employment” become a fixation with Canadians and take precedence over the broader objectives of freer and greater international trade and prosperity for all peoples.

“Real full employment, which means a higher and better standard of living for everybody, can only come on an international or even a world scale,” said one. “But you can get a sort of rock pile full employment by the opposite method, of economic nationalism. You don’t raise the standard of living that way, and you don’t really make your people better off, but you can put them to work. That’s what Hitler did, for one example. If we let ourselves be too preoccupied with that word ‘employment’ to the exclusion of all else, we may find ourselves heading back into the dreary spiral of the thirties — high tariffs, retaliatory tariffs, currency depreciation, export subsidies, embargoes, barter agreements, and finally World War III.”

But how far is the objective of freer trade compatible with the props our weaker industries may need? Or how far is it politically feasible to let them go unpropped and take the consequences? That’s one of Canada’s special problems.

Even suppose it were solved. Suppose we had solved it and all the other problems we share with the rest of the free world. Suppose a formula were found for world trade, full employment, everlasting prosperity and mutual benefit. Canadians still wouldn’t be out of the woods. We’d be slap up against another of our unique burdens, the old constitutional obstacle.

Under the British North America Act the Dominion has no power in some major fields of social legislation, no exclusive taxing power except in the now secondary “indirect” field. Canada signed the Treaty of Versailles, but the Privy Council ruled us impotent to carry out the labor conventions the treaty involved. We’ve got not one

political structure but 10, and in peacetime it’s never been feasible to harness all of them into a smoothly stepping team.

This spring provincial and federal governments will meet again to seek solution of their financial and social problems. These were never so grave, never so acute. All our war controls hang on the slender constitutional thread of the War Measures Act. When the emergency passes they’ll become invalid overnight, even though chaos might result.

But though everyone realizes the gravity of this problem, few think the outlook bright. “Autonomy” feeling is high in several provinces, notably Quebec but also in Ontario and British Columbia. Any way you look at it, it’s a headache.

There, in rough outline, is our postwar task. Next question is, what are we going to do about it?

One observation can be made by the most casual observer: No matter what party assumes power after the war, circumstances and their declared intentions indicate that their policies will not be far apart in fundamental principle.

Broadly, there are only three ways to tackle the job. First, complete planning from the top, everything fitted into a national blueprint. That is how they do it in Russia. Second, no planning whatever—unrestricted private enterprise, operating on the Adam Smithian principle of “enlightened self-interest” with no co-ordination beyond its own inner equilibrium. This has never been tried in any country at any time, but some people regard it as the right mark to shoot at. Third, a judicious medium between the two extremes, with planned state expenditures taking up the slack wherever private enterprise falls down.

No Party in Canada, not even the Communist Labor-Progressives (who vote with the Liberal Government nowadays, by the way), proposes the first method. Not the truest, bluest Tory proposes the second. All Parties espouse the third, or middle course.

Liberals plan to “use in peace the methods we have used in war”— presumably co-ordination of private enterprise into a national plan, with the state as balance wheel. Progressive Conservative Leader John Bracken would have the state “underwrite” employment and prosperity; Mr. Bracken calls for a sound medium between socialism and “piecemeal policies.” The CCF disclaims any intention of taking over all enterprise or centralizing all economic power in the state—they too, they say, would have both public and private enterprise working alongside one another within the same economy.

This is not to minimize our political differences, which are numerous and profound. In essential principle, however, the approach of each Party is the same. In attitude, emphasis, procedure in specific cases there will doubtless be a world of difference, enough to mark our three major Parties as wholly distinct one from the other.

Perhaps the most obvious fact in the whole picture is that John Citizen, the man who will make the first decisions, won’t let any of the Parties pretend there isn’t a job to be done, nor yet that it can’t be done. Not in a country that needs half a million houses before everyone will have a really habitable dwelling. Not in a country where less than one farm in five has electricity; where in one of Quebec’s larger cities more than half the dwellings have no bath or shower, not even one shared with a neighbor. You can’t talk about “overproduction” where needs like that exist. You can’t tell a country

which 1ms done such a war job as Canada, that, it can't lick the peace job too.

But the citizen bad better not let anyone tell him, on the other hand, that the problem is simple or easy. No matter who tackles it or how, it’s going to be very, very tough.

Take just one complication of the hundreds that this outline hasn’t even suggested. Our “full employment” breakdown puts a billion and a quarter men into agriculture, 200,000 more than in 1941. How are we going to induce them to go back on the land?

In a recent survey of soldiers’ employment preferences the boys were asked if they’d like to go into farming. The same query in 1918 brought a “yes” from 80' . This time only 18% said “yes.” And this, of course» was to

the proposal of becoming an ownerfarmer, not a farm hand.

Nobody wants to be a farm band if he can help it, and the wages will tell you why. According to Colin Clark in “The Conditions of Economic Progress, ” Canadian farm wages before the war were 24% lower than industrial wages— and our industrial wages, by North American standards, were not high.

How, in a condition of full employment,, can we find men to work on the land for money like that? And if we quadruple their pay, can we avoid upsetting the whole cost-of-living structure?

There’ll be hundreds more questions, just as hard as that one. Whoever is in power when peace comes, he’ll need our prayers.