PRODUCTIVITY, HOURS, AND COMPENSATION

OF RAILROAD LABOR, 1933 TO 1936

By WITT BOWDEN, of the U. S. Bureau of Labor Statistics

AN OUTSTANDING fact about railroad transportation in recent years has been the continued increase in the productivity of labor. Productivity in terms of average output per man-hour worked in 1936 was 32.8 percent greater than in 1926, and 80.9 percent greater than in 1916. The ultimate product of railroad labor in terms of services rendered to patrons of the railroads is measured in revenue traffic units. These are a weighted combination of revenue ton-miles (tons of revenue freight times miles per ton) and revenue passenger-miles (number of passengers times miles per passenger). Facilities for carrying passengers and freight must be maintained even when the amount of revenue traffic is small. The amount of revenue traffic in 1936 was 25.9 percent less than in 1926 and 12.2 percent less than in 1916. The large increase in labor productivity as measured by the amount of revenue traffic per man-hour is therefore a particularly significant indication, although not an exact measure, of the extent and importance of technological changes in recent years.

In former articles in the Monthly Labor Review,' the principal changes in the productivity, hours, and compensation of railroad labor were analyzed for the years 1916 to 1932, with supplementary data for January to July 1933. In respect to some of the principal items covered in the earlier articles, the changes from 1916 to 1936 are now presented in summary form (table 1 and accompanying chart).

The amount of traffic handled by the railroads was adversely affected by the general decline of business and by the development of competing modes of transportation. Passenger traffic suffered most severely. The high point of passenger traffic was reached in 1920, with almost 47,000,000,000 revenue passenger-miles. The number in 1926 was 35,478,000,000. In 1932, passenger traffic was less than onehalf (47.8 percent) of the 1926 volume, and in 1936 only 63.2 percent of the 1926 volume. Freight traffic, which is a much more significant measure of the amount of business handled by the railroads, declined somewhat less seriously between 1926 and 1932 and made a larger gain between 1932 and 1936. The number of revenue ton-miles in 1932 was, however, only little more than one-half (52.7 percent) of the number in 1926, and in 1936 was 76.4 percent of 1926. The combined volume of passenger and freight business in terms of revenue-traffic units 2 conforms much more closely to revenue ton-miles than to revenue passenger-miles.

1 Productivity, Hours, and Compensation of Railroad Labor, in Monthly Labor Review, December 1933 (pp. 1275-1289), January 1934 (pp. 43-63), and February 1934 (pp. 269-288). (Reprinted as serial No. R-75).

Revenue passenger-miles times 2.6 plus revenue ton-miles. For a discussion of the weighting of revenue passenger-miles, see Monthly Labor Review for December 1933 (p. 1279).

In 1916 the average number of employees at the middle of the month, excluding principal salaried workers,3 was 1,626,066. In 1920, the peak year, the number was 2,004,277. In 1926 the number had fallen to 1,757,298, although revenue traffic was somewhat greater than in 1920. After an almost continuous decline (1929 being an exception, with an increase of about 5,000 over 1928), the number fell below a million in 1933 and remained slightly below that number in 1934 and 1935, rising to 1,046,718 in 1936. Total man-hours worked in 1936 were 51.5 percent lower than in 1916 and 44.2 percent lower than in 1926. The number of revenue-traffic units in 1936 was 12.2 percent less than in 1916 and 25.9 percent less than in 1926. Between 1916 and 1936, average man-hour output increased 80.9 percent, and between 1926 and 1936, 32.8 percent.

TABLE 1.-Revenue Traffic, Employment (Excluding Principal Salaried Groups), and Average Man-Hour Output, Class 1 Railroads and Principal Switching

and Terminal Companies, 1916 to 1936

[Derived from reports to the Interstate Commerce Commission. Index numbers based on 1926-100]

1 Revenue passenger-miles times 2.6 plus revenue ton-miles.

2 Switching and terminal company employees and man-hours 1933-36 are estimated for all employees

The classification of railway employees by the Interstate Commerce Commission and the method used in this and the earlier articles to exclude principal salaried employees are described in the Monthly Labor Review for December 1933 (p. 1284). In addition to changes there mentioned in the Interstate Commerce Commission's classification, a further revision of the classification was introduced in January 1933. In the interest of comparability over the period covered, some salaried employees are included.

except principal salaried groups by means of ratios applying to all employees. The figures for 1917-20 include estimated switching and terminal company employment based on actual figures for 1916, 1921-32.

Before July 1921, the reports of the Interstate Commerce Commission are based on hours worked, and thereafter hours worked and hours paid for are both reported. (See Monthly Labor Review for December 1933 (p. 1284).) In this and the earlier articles, hours worked are used in tables which go back of 1922 and hours paid for are used when comparability with earlier figures of hours worked is not required.

Revenue Traffic Versus Maintenance of Facilities for Traffic

A distinction must be made between the revenue traffic handled by the railroads and the maintenance of facilities for rendering service. For example, a regularly scheduled train must be run, and the amount of work required to run it, although variable, is not substantially less when 5 half-filled cars make up the train than when there are 10 well-occupied cars. Although the amount of work required in the second case is not greatly in excess of the amount required in the first case, the number of passengers handled, the number of passengermiles, and the amount of revenue received may be twice or three times as great. When freight traffic falls off, it is possible to reduce freight crews somewhat more readily than in the case of passenger crews, but the maintenance of freight facilities as well as passenger facilities requires a working force that cannot be varied in size in proportion to the amount of revenue traffic. Even in the absence of technological changes the amount of work required to maintain traffic facilities increases less rapidly than the amount of revenue traffic when revenue traffic is expanding. On the other hand, when revenue traffic falls off, the amount of work required to maintain traffic facilities declines less rapidly than revenue traffic. It must be noted, however, that some kinds of repairs and replacements are likely to be diminished during a period of declining revenue and to be stimulated abnormally during an upturn.

The part performed by the railroads in the transportation function as a phase of the national economy is most adequately measured by revenue traffic. Ratios of revenue traffic to man-hours are therefore the best available measures of the productivity of labor in railroad transportation, viewed in its economic sense as a service rendered to the patrons of the railroads. But the extent of the services rendered by railroad workers to their employers in maintaining and operating the facilities required for revenue traffic is not adequately measured by revenue-traffic units. These services are indicated roughly by other units such as the car-mile, the train-mile, and the transportationtraffic unit (table 2). The transportation-traffic unit is a composite unit (table 2, note 2) representing the operation of rolling stock and indicating roughly the extent of wear and tear on track and equipment. In 1933 revenue passenger-miles fell to 46.1 percent of the number in 1926, while passenger train-miles were 66.5 percent of the 1926 mileage (table 2). The expansion of revenue traffic after 1933 decreased the disparity; revenue passenger-miles in 1936 were 63.2 percent of 1926, while passenger train-miles were 69.9 percent of 1926. Revenue ton-miles in 1933 were 56.2 percent of 1926 and freight trainmiles were 62.2 percent. In 1936, the disparity had virtually disappeared, evidencing a successful readjustment of freight traffic facilities

to a lower volume of revenue freight. Transportation traffic units in 1933 were 64.6 percent of the number in 1926, whereas revenue traffic units in 1933 were only 54.4 percent of 1926. The discrepancy was somewhat reduced by 1936, when the number of transportation traffic units was 81.1 percent of 1926, while the number of revenue traffic units was 74.1 percent of the number in 1926.

TABLE 2.-Revenue Traffic, Car-Miles, Transportation-Traffic Units, and Train-Miles, Class I Steam Railroads, 1926, 1933–36

[Derived from reports to the Interstate Commerce Commission]

Transportation traffic units measure much more adequately than revenue traffic units the amount of services required for operating rolling stock and maintaining track and equipment in a state of efficiency. However, there are certain forms of maintenance and replacement work that are more variable than is indicated by the figures of transportation traffic units. The tonnage of rails laid in replacement in 1933 was only 22.6 percent of the tonnage laid in 1926; and in 1935 (the latest date with available figures), only 30.4 percent. Cross ties and bridge and switch ties laid in replacements in 1933 were somewhat less than half the quantity laid in 1926. Cross ties laid in 1935 were 54.9 percent of the number laid in 1926 and the quantity of bridge and switch ties laid in 1935 was 56.7 percent of 1926 (see table 3). Replacement, however, is not the major part of maintenance work. It has been estimated that not less than 50 percent of the cost of track maintenance is incurred at the rail joints. Even when replacements are postponed,

Railway Age, Dec. 12, 1936, p. 863: Means Used to Boost Efficiency, by L. A. Downs, president of the Illinois Central,