Mr. FREAR. Are those represented on this chart [indicating the chart "Consumption Goods vs. Durable Goods"]? Mr. DENBY. No, sir; those are figures for the United States as a whole. Those I have been quoting are for Pennsylvania. Mr. REED. That chart indicates production? Mr. DENBY. The volume of production. The figures I am now reading from Pennsylvania indicate employment. Mr. REED. Would you mind putting those charts in the record, if it is agreeable to the chairman? Mr. DENBY. I will be glad to do that. I will be glad to submit the cuts, if you would like to have them to be reproduced in the record. EMPLOYMENT AND WAGE PAYMENTS IN LEATHER INDEX NUMBER 150 EMPLOYMENT WAGE PAYMENTS-- 140 130 120 110 100 90 80 70 60 50 40 30 20 INDEX NUMBER 150 The CHAIRMAN. Without objection, the permission is given. Mr. DENBY. As I have said, the metal industries, normally employing about one fourth of the total workers in all manufacturing industries in Pennsylvania, show a similar situation, with a precipitous drop beginning in 1929, and employment in 1932 averaging little over 50 percent of average. The transportation-equipment industries, another important industry group in Pennsylvania, provide another example of the wide fluctuation in the output of durable goods. This group includes the manufacture of automobiles, automobile bodies and parts, locomotives and cars, railroad-car repair, and shipbuilding. At the close of 1933 employment in these industries had fallen to 40 percent of average. A similar situation prevailed in the construction and contracting industry, one of the most irregular of the group of durable goods industries. The following table gives comparative figures relating to unemployment for the United States as a whole, in the various groups, as of March 1933 and January 1934: EMPLOYMENT AND WAGE PAYMENTS IN STONE, CLAY At the left of the table you will see the figures for those gainfully employed in all industry in the United States as of the 1930 census. Those are the figures I mentioned before, but they are well to bear in mind. You will note that there were producers of service, 23,000,000, and producers of goods, a total of 26,000,000, divided into 10%1⁄2 million in agriculture, 52 million in the manufacture of other consumption goods, and 10 million in the manufacture of durable goods. You will also note as to unemployment in March 1933, in the service industries, there were 5.9 million unemployed, or 26 percent of all employables in that group. In agriculture there was no unemployment in the sense that agricultural workers at least have a living, and you could hardly calculate unemployment in that industry, and that is not intended to be covered by the present bill. You will also note that in the manufacture of consumption goods. there were 11⁄2 million unemployed in March 1933, and the unemployment in the durable-goods industries was almost 61⁄2 million, or 64 percent of those normally engaged in durable-goods production. The striking thing about these figures is that unemployment in the durable-goods industries was about half of all employment in January. The figures for 1934 indicate a substantial improvement in both service and consumption-goods industries, but not so great improvement in the durable-goods industries, where it was 51 percent of those normally engaged in those industries. Now, I have only laid the basis of my argument. It is evident that unemployment among the producers of durable goods is the key to the entire problem of unemployment; for not only do they constitute a vast body of unemployed, but it is their unemployment that causes the unemployment among those who normally are engaged in providing services. Colonel Ayres has calculated that it may be assumed that approximately one person engaged in the service industries would be reemployed for each person reemployed in the durable goods industries. It would require more transportation, a greater number of telegraph messages, more clerks, and would mean greater employment. In the light of what I have said, let us consider the principal arguments for unemployment insurance. They are three. First, that unemployment insurance or reserves, with rates of contributions proportioned to unemployment experienced within individual enterprises -and by that I mean allowing employers whose employment is regular to reduce their payments into the fund, as has been advocated in every case, and the principle of which is embodied in the present bill-will tend to regularize operations through the imposition of a penalty upon irregularity. I have read the transcript of the testimony of the first 3 days of the hearings on this bill, and heard the testimony given at the hearing yesterday. The Secretary of Labor emphasized the tendency of these measures to promote regularization of employment, as one of the greatest arguments. Mr. Draper, who favored this measure, favored it for the same reason. Mr. LEWIS. Miss Perkins based her argument upon the experience in foreign countries, did she not? Mr. DENBY. Yes, partly. It would extend my comment too long to go into that. I would like to refer you to the statement made in the hearing last night by Mr. Gall, and also the statement made by Professor Todd on that same question. Mr. LEWIS. It seemed to me that might have a very important bearing on this situation. Mr. DENBY. I shall later refer to it insofar as it bears on the argument I am making. EMPLOYMENT AND WAGE PAYMENTS IN TRANSPORTATION INDEX NUMBER 150 EMPLOYMENT WAGE PAYMENTS---- 140 INDEX NUMBER 150 140 The second principal argument for unemployment insurance is that the accumulation of an insurance or reserve fund, from which payments are made in times of unemployment, will provide a reservoir of purchasing power, the use of which will tend to lessen fluctuations in business by maintaining consuming power. Senator Wagner, speaking of the pending bill, stated that the "greatest merit" of unemployment insurance is that it would "tend to minimize if not to abolish, the likelihood of depression." The Secretary of Labor also emphasized this argument very emphatically. |