Labor Force, Employment, and Unemployment, 1929-39

Home , April 1930, Unemployment

Technical Note

Total Labor Force Labor Force, Employment, and Unemployment, 1929-39: To estimate the total labor force for the years between 1929 and 1940 it was necessary (a) to Methods 1 Estimating establish comparable Census bench-mark figures for 1930 and 1940, (b) to interpolatebetween these Estimates of the total labor force,employment, bench-markfigures and extend them back to 1929. and unemploymentin 1929-39, which were pre- Estimates of the labor forcein the Census week pared by the Bureau of Labor Statistics several of 1940 (March 24-30) that are comparable with years ago in order to fill a gap in the official the currentestimates of the MRLF, have recently statistics,have been revised recently. These were been published by the Bureau of the Census.2 designed for comparability with the monthly Estimates for the comparable week of 1930, were series issued by the Bureau of the Census be- computed afteradjustment forthe change in labor ginningin 1940, and togetherthese series provide force definitionsbetween the 1930 and 1940 Cen- a continuous set of estimates from1929 to date. suses8 and for the effectsof the improvementin A wide variety of estimates of labor force and interviewingprocedure introduced into the MRLF unemploymenthad previously been prepared by in July 1945.4 The workerrates (i. e., the percent- private agencies and individuals. These statistics age of the population in each age-sex group who were of considerable value in informingthe public were in the labor force) were then computed for about the gravity of the unemploymentsituation the bench-markperiods in 1930 and 1940.6 in the 1930's. The labor force estimates for 1929 and 1931-39, In 1945, the BLS developed and made available on an April seasonal level, were calculated by (1) preliminaryestimates of labor force,employment, interpolating linearly, between the worker rates and unemploymentfor the 1929-39 period, com- for 1930 and 1940, and (2) applying the resultant parable with those then published by the Bureau rates to Census estimatesof population by age and of the Census in its Monthly Report of the Labor Force (MRLF). Subsequently, the Census Bu- 1See: United States Bureau ofthe Census, Labor Force, Employment and Unemploymentinthe United States, 1040 to 1046, Series P-50, No. 2. reau published revised estimates for 1940-45, *The 1030 Census included as"gainful workers" seasonal workers whowere incorporatingadjustments resulting from an im- notactually atwork or looking forwork during the Census week, aswell as someretired persons and inmates ofinstitutions, whocould not have been provement in interviewingprocedure, introduced includedinthe "labor force" asdefined inthe 1040 Census. On the other in July 1945. Corresponding adjustments have hand,the 1030 Census excluded young persons who were actually looking for workbut had not yet established a gainful occupation. Arevision oíthe 1030 now been made in the BLS estimates. estimatestoallow for these and other differences appears in: United States The methods used by the BLS in developing its BureauofThe Census, Estimates ofLabor Force, Employment andUnem- estimates of labor and unemploymentinthe United States, 1040 and 1030 (1044). force,employment, «The adjustment forcomparability withthe revised 1040 Census estimates, ployment are discussed in the present article, and asshown inCensus release Series P-50, No. 2 (1046) was made by computing a is made with earlier series. theratios ofthe revised tounrevised 1040Census estimates foreach sex, age, comparison andemployment statusgroup, and applying these ratios tothe corresponding i PreparedbyStanley Lebergott, formerly ofthe Bureau's Division of groupsin1030. EmploymentandOccupational Outlook. Lester Pearlman, Sophia Cooper, 1Although inthe present instance worker rates for age-sex groups were HaroldWool, and other staff members cooperated inthe development of used,calculations might also have been made to allow for the effects ofthe theestimates. Valuable advice was also received from members ofthe changingracial composition ofthe population. Tests indicated, however, BudgetBureau's Technical Committee onLabor Supply, Employment, and thatsuch a refinementwould produce nosignificant change in thefinal UnemploymentStatistics. estimate. 50

This content downloaded from 146.142.1.10 on Wed, 1 Oct 2014 08:26:29 AM All use subject to JSTOR Terms and Conditions LABOR FORCE- ESTIMATINGMETHODS 51 sex for each year.® The labor force estimates for Armed Forces 1929-39 were then adjusted to an annual average Estimates of the net of the armed forces basis by use of a seasonal adjustment factor de- strength rived fromthe month-to-monthmovement shown prior to 1940 were obtained by the BLS directly in the MRLF since 1940.7 fromthe armed services. The estimates as shown table differ fromthose used in the In table 1, a sharp contrastis apparent between (in 1) slightly MRLF in 1940. The Census Bureau the gradual increase in the labor force shown for beginning excludes from its estimate of the total the years 1929-39 and the marked fluctuations currently labor force about members of the armed reportedsince 1940 by the Bureau of the Census. 150,000 forces who were stationed outside of the conti- This reflectsin part the unprecedentedexpansion nental United States in March 1940 and who were of the labor forceunder wartimepressures and the thereforenot enumerated in the Census of that subsequent contraction. In part, however, it arises because the full extent of variations in the date. This group is, however, included in the BLS estimates. labor force cannot be determined precisely for those years priorto 1940 when no direct enumerations of the labor forcewere made. Employment

Table 1.- Totallabor The estimatesof total employmentrepresent the force,classified 1 by employment status, 1929-1H7 sum of: (1) nonagriculturalemployees (i. e., wage [Annualaverages, inthousands] and salary workers), (2) nonagricultural self- Civilianlabor force employed, unpaid family workers,and domestic service workers,and (3) agriculturalemployment. TotalArmed Employed Estimates of were Year labor forces nonagricultural employees based on the movement of the recently revised «55 „Total , «?•cul- St BLS series of employees in nonagricultural t- Ä _ establishments.8 This series was adjusted to the bench-mark totals of 1029 49,440 260 49,18047,630 10,450 37,180 1,550 nonagricultural employees 193 0 50,080 260 49,82045,480 10,340 35,140 4,340 in 1930 and as estimated from the 193 1 50,680 260 50,42042,400 10,290 32,110 8,020 1940, Census 193 2 51,250 250 51,00038,940 10,170 28,770 12.060 data.9 193 3 51,840 250 51,59038,760 10.090 28,670 12,830 193 4 52,490 260 52,23040,890 9,900 30,990 11,340 The estimates of the self- 193 5 53,140 270 52,87042,260 10,110 32,150 10,610 nonagricultural 193 6 53,740 300 53,44044,410 10,000 34,410 9,030 were for the series. 193 7 54,320 320 54,00046,300 9,820 36,480 7,700 employed developed present 193 8 54,950 340 54,61044,220 9,690 34,530 10,390 The to ratios of 193 9 55,600 370 55,23045,750 9,610 36.140 9,480 general procedure was develop 194 0 56,180 540 55,64047,520 9,540 37,980 8,120 194 1 57,5301,620 55,910 50,350 9,100 41,250 5,560 self-employed persons per employee separately 194 2 60,3803,970 56,410 53,750 9,250 44,500 2,660 for each and each These 1943.- 64,5609,020 55,540 54,470 9,080 45,390 1,070 industry group year. 194 4 66,04011,410 54,630 53,960 8,950 45,010 670 were then to the estimates 194 5 65,29011,430 53,860 52,820 8,580 44,240 1,040 applied corresponding 194 6 60,9703,450 57,520 55,250 8,320 46,930 2,270 of For those between 1929 and 194 7 61,7601,590 60,170 58,030 8,260 49,770 2,140 employees. years 1939 when Censuses of Manufactures, Business, >Estimates forthe period 1929-39 were prepared bythe Bureau of Labor and Construction were the ratios were Statistics.Estimates forthe period 1940-47 were adapted from U. S.Bureau available, ofthe Census, Labor Force Bulletin, Series P-50, No. 2. 1Total labor force includes civilian labor force and the armed forces. The computed from the Census data. For inter- estimatesoftotal labor force and of the armed forces wore adjusted upward censal the ratios toinclude about 150,000 members ofthe armed forces stationed outside the years, were computed on the continentalUnited States in March 1940, and who were not enumerated in of theCensus ofthat date. The Census Bureau reduces itscurrent estimates basis the relationshipbetween (1) the ratios for ofthe total labor force thisnumber inorder tomaintain withthe 1940 Census. by comparabilityCensus years and (2) the number of employees *Population estimates used were Census estimates ofthe population for 8This series was presented inthe Monthly Labor Review for December July1,of each year, as publishedinCensus release Series P-45, No. 5. 1947(p. 647). *A final adjustment wasmade to include within the total labor force mem- *Bench mark estimates ofnonagricultural employees forApril 1930 that benof the armed forces stationed outside ofthe continental United States werecomparable with the current MRLF estimates were prepared inco- andwho were, therefore, notin the Census base figures foreither 1930 or operationwith the Bureau of the Census. These were then adjusted to 1940.There were about 150,000 members ofthe armed services stationed annualaverage levels on the basis of monthly employment dataof the BLS. outsideofthe continental United States in March 1940 and about 130, 0C0 Estimatesfor1940 were based on the revised Census data published inCensus in1930. releaseP-50, No. 2f and on unpublished Census estimates.

This content downloaded from 146.142.1.10 on Wed, 1 Oct 2014 08:26:29 AM All use subject to JSTOR Terms and Conditions 52 LABOR FORCE- ESTIMATINGMETHODS MONTHLYLABOR in the appropriate industry group for the same from a prosperitylow in 1929, to peak levels in year.10 1932 or 1933. After 1933, the movements of the Agriculturalemployment (including family and respectiveseries were also generallysimilar. How- hired workers) was estimated on the basis of the ever, a more detailed examination reveals sig- movement of the series of the Bureau of Agricul- nificantdifferences in level, as well as in year-to- tural Economics, and adjusted to annual average vear movement. in 1930 and the use of employment 1940, by Table 2.- Selectedestimates of unemploymentin the Census data.11 UnitedStates 1929-89 [Inthousands] Unemployment ButMil Alex" Amer-Congress estimates be trial Robert Unemployment may computed (1) Y„r oftri2,US- Nathaa by direct enumerationof the or ton Ä' (Ä- C°n£r- unemployed, (2) InstituteLabor zations Board by deducting the total of those actually employed fromthe total available forwork (the labor force). 1929. 1,550 3,456 1,864 1,831 429 1,752v 1930- 4,340 6,929 4,735 4,710 2,896 4,646 The method of direct enumeration is currently 1931 8,020 10,939 8,568 8,322 7,037 8,118 1932 . 12,060 14,728 12,870 12,120 11,385 11,639 utilized in the sample surveys of the MBJLF. It 1933 . 12,830 14,394 13,271 12,643 11,842 11,942 1934. 11,340 12,419 11,424 10,845 9,761 9,998 was also employed in the Population Censuses of 1935 . 10,610 11,629 10,652 10,050 9,092 9,102 1936 . 9,030 10,008 9,395 8,756 7,386 7,723 1930 and 1940. But for those years in which no 1937. 7,700 8,366 8,282 8,109 6,403 6,856 1938 10,390 11,934 10,836 11,030 9,796 9,865 national enumerationswere made, including 1929 1939. 9,480 10,696 9,979 10,813 8,786 9,835 and 1931-39, it was necessary to use the second Sourcesofthe nongovernmental estimates: Alexander Hamilton Institute: method, and to estimate unemploymentby sub- correspondencewiththe institute. American Federation ofLabor: Ameri- canFederationist, August1941 (p. 25). CongressofIndustrial Organizations: tracting total employment from the total labor unpublishedfigures ofMarch 1941. Robert Nathan: Social Security Bulle- tin,January 1940 and subsequent dates. National Industrial Conference force.12 Board:Economic Almanac for1948, (pp. 269, 270). As shown in table 2 the present unemployment There are five reasons for the differ- series differsfrom estimates of major previous unemploy- ences shown between the BLS series and earlier ment for the 1929-39, although general pattern estimates. is not far different.18All of the series cited, for (1) The population data utilized in previous example, show the steep rise in unemployment estimates were in general less accurate than the " Thisprocedure isillustrated bythe method ofestimating thenumber of officialBureau of the Census estimates self-employedpersonsin retail trade. The number ofemployees perprop- employed rietorinretail trade was determined forCensus years from the censuses of in the present computations. The latter were retailtrade. These ratios ranged from a low of 2.367 inthe depression yearof based on data not available until recent 1933to a highof 2.988 in 1929, with intermediate values for 1935 and 1939. years. Theratio changed with the general level of retail trade. It was thus possible (2) In previous unemploymentseries, the esti- tocompute regression coefficients fromwhich estimates ofthe ratios for the mate of the labor forcewas made in terms of the interveningyearswere derived. By dividing these latios of employees per proprietorintothe total number ofemployees, estimates were obtained of 1930 Census concept of "gainful workers"- a themovement ofself-employed inretail trade over the period. This "move- which is not to that used in mentseries" was then adjusted tothe bench-mark totalof self-employed and concept comparable own-accountworkers derived from the 1940 Census (after adjustment tothe the 1940 Census and in the MRLF. Furthermore, revisedMRLF level) to yield the estimates oftotal self-employed inretail tradein 1929-39. certain of the previous estimatesmade inadequate » Forthe Census week of 1930 a separate estimate ofagricultural employ- allowance for the fact that the number of workers mentwas prepared comparable inconcept with that of the 1940 Census. This relative to the does not remain con- figurewas then adjusted toan annual average level on the basis ofthe monthly population dataof the BAE, after allowing fordifferences inseasonal movement between stant. Sufficientadjustment was not made for thelatter series and that of the MRLF for years since 1940. the effectsof that occurred in the " Theresults ofthe Census ofPartial Employment, Unemployment, and changes age Occupationsin1937 could not be used for the present estimates because the composition of the population, in school attend- methodsused in this Census were not comparable withthose used in 1930 and and other as revealed a com- 1940,and because the female worker rates shown inthe 1937 Census appeared ance, factors, by inconsistentwiththose shown inall other available data. parison of the 1940 worker rates with those for " Amongtheseries onunemployment whichwere examined forthis period 1930 and earlier Census werethose ofthe Alexander Hamilton Institute, theAmerican Federation ol years. Labor,Daniel Carson, the Cleveland Trust Co., the Congress ofIndustrial (3) All the earlier unemploymentseries relied Organizations,Corrington Gill,Theodore Kreps, the Labor Research Associ- on BLS data for ation.Robert Nathan, the National Industrial Conference Board, and the primarily estimating nonagri- NationalResearch League. Estimates forindividual dates, including those cultural employment, but, necessarily, none of inthe Census of Unemployment for1937, the National Health Survey for them could take account of the 1946 revisions in 1935-36,theNew York Sun and the Dorothy Thompson-Arthur Krock estimatesfor1940, were likewise reviewed. the BLS estimates.

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(4) In many earlier series the number of self- ing satisfactoryadjustment for changes in worker employed in nonagricultural pursuits was esti- rates which arise from changing economic condi- mated, by and large, on the assumption that the tions. For example, the participation of women self-employedvaried in direct proportionwith the in the labor marketduring the depths of the depres- number of employees. Other estimators have sion may have been greater than is apparent from treated the entiregroup or large segmentsof it as the 1930 and 1940 enumerations. When the head a constant. Industrial censuses show that neither of the household was out of workduring the 1930's, procedure is satisfactory. When business condi- it was not infrequentthat the housewife in the tions improve, additional employees tend to be family would seek a job. On the other hand, hired at a fasterrate than the rate of increase in some young personsremained in school longerthan the number of businesses; the pattern is reversed they would have in more prosperous years. The when conditionsworsen. As a result, the ratio of net effectof these omissions and additions cannot employeesto proprietorsin all importantindustry be measured but it is probably not enough to groups changed continuallyduring the 1930's. change materially either the level or trend of un- (5) The basic unemploymentbench mark for employmentfor the years 1929-39.14 previous estimateswas necessarilythe unadjusted The present unemploymentseries is primarilya resultsof the 1930 Population Census. In making measure of total unemploymentof those persons its present estimates, the BLS had the advantage who were customarilyin the labor force in terms of both revised 1930 data and materials fromthe of the trends shown by the 1930 and 1940 popu- 1940 Population Census. lation censuses. It does not measure the extent to which the Nation's manpower was not fully Evaluation of Series utilized during the depression. Many persons were employedat part-timejobs. Still otherswere The estimates of labor and force, employment, subject to what has been called disguised unem- in this article are based unemploymentpresented ployment,since they worked at jobs well below on a detailed considerationof all available mate- their capacities, and could not provide society recent revisions in Census rials, including major with the optimum use of theirservices. and BLS data. labor force and However, any Moreover, the labor potential of the population series which does not rest on a unemployment is greaterthan that indicated by adding unemploy- direct and continuous enumeration is to subject ment to employment. As the war well demon- certain defects. strated, many persons not usually in the labor One such - which attaches to shortcoming any force take jobs in times of emergency. Such estimates for the to the years prior development qualifications as these must be continuallyborne of the MRLF - is the fact that even errors slight in mind in using the labor force and unemploy- in the estimationof employmentor labor forcemay ment estimates. errorsin the estimates of produce relativelygreat " Thisconclusion isbased on a specialstudy of changing worker rates unemployment. Anotheris the difficultyof mak- duringthe 1930's.

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