A publicity agent for one of the large electrical companies the other day attracted much attention by the announcement of a "mechanical man" which, responding to various notes of sound, would answer a telephone call, give information or execute an order, and hang up. Doubtless the story gave rise to reflections on Frankenstein, or the Robots of R. U. R., and stimulated thought on the relationship of man to automatic machinery. Yet the relationship in this case was limited—in its economic importance—to the fact that the machine could displace one or two workmen. In this sense, every new automatic machine is a "mechanical man," and many mechanical men are introduced into industry every day which can replace, not one, but a score or more of flesh and blood workers.
The natural response of labor to such innovations is hostile. When power looms were first used in the textile industry, the weavers rioted and smashed them. Unemployment was widespread; misery and starvation crept over the thresholds of the workers' families. Since those days, mechanical invention and improvement has become an everyday matter. Economists have lectured labor on the short-sightedness of opposition to devices which, through augmenting man's productive power, are capable in the long run of enriching everybody. Unions themselves have discovered by bitter experience the futility of trying to bar out new inventions. Official labor has gradually been converted to hospitality, and even encouragement, toward higher productivity. And yet the old response remains, under the surface, and the old problem still arises. Hundreds of skilled and semi-skilled craftsmen today face the encroachment of the machine upon their means of livelihood. Whatever may be the benefits of machinery in the long run, it may and frequently does throw workmen out of their jobs, at least for periods sufficiently long to cause great hardship.
Are we coping with this problem at the present time? The index of factory employment issued by the Federal Reserve Board shows a steady tendency toward diminished employment in the recent years of high and increasing productivity. This tendency was marked even before there was any falling off in the indices of output itself. The diminished buying power on the part of factory workers which it probably caused—in spite of slightly higher wages received by those who were still at work—may have been one of the reasons for the recent slowing up in the demand for products. Now that production itself is slackening, more unemployment results, and a vicious circle is begun. At present, the factories appear to be employing about 10 percent fewer operatives than they did in 1919.
What has become of those struck off the factory payrolls? It has been suggested that perhaps in large part they are old people, wives and children, who are now supported by the more capable members of the family still at work. If so, the standard of living of the wage-earners as a whole has been falling in recent months, since the total pay-roll has been diminishing, as well as the number at work. Another theory is that, as factories dispense with wage-earners, they drift off into other occupations. But where do they drift? Not on to the railroads or into the mines, since employment in these two occupations has been decreasing also. Not to the farms, because, as we all know, the farm population has been declining. The construction trades, which are still to a large extent skilled handicrafts, cannot have absorbed many of those set adrift. And it can hardly be asserted seriously that they have found room as salesmen, advertisers or employees of stores and merchandising concerns. Reports from various sources indicate that there is a large and growing number of genuinely unemployed. The fact is that we have no reliable figures on unemployment, and therefore do not know what happens to the victims of the machine. And we have no unemployment figures because we have no comprehensive system of labor exchanges to register them and find employment for them if possible. Nor have we mitigated any of the hardships of those out of work because, nationally, we have not adopted any system of unemployment insurance, or any comprehensive remedies for the lack of jobs.
Powerful and progressive unions which exercise a large measure of control in their respective industries have visualized the problem of the machine and shown how to solve it in a comprehensive way. They permit the introduction of new devices—with certain restrictions which safeguard the workers and so tend to benefit the whole community. When a machine is introduced, the pay of the operative is not decreased; and as the productivity and prosperity of the industry grow, the workers share in the growth through wage advances. That tends to sustain the workers' buying power and so to keep all industries busy. The machines are not allowed to be introduced so rapidly as to create marked unemployment; it is expected that the natural growth' of the industry, stimulated by the addition to efficiency which the machine constitutes, will take care of the workers already displaced before the numbers of the unemployed are enlarged. There are well-administered labor exchanges to find jobs for the workers and workers for the jobs. Finally, the unavoidable margin of unemployed is kept from destitution by unemployment compensation charged against the industry as a whole.
Labor generally, however, has no such protection. The A. F. of L. unions have endorsed the policy of seeking higher wages as productivity grows; but the increases in wages are not always forthcoming, either to their members or to the unorganized. There are, furthermore, no general system of employment exchanges and no widespread system of unemployment insurance. Labor has seen the light as to the larger meaning of increased productivity; it has officially abandoned opposition to new machinery and better methods. But neither the management of industry nor the political government which it controls has taken the first step toward mitigating or alleviating the temporary unemployment which an increase of productivity may cause. In fact, the owners and managers of industry have bitterly opposed all suggestions of the kind.
This is a grievance of the first order, which labor holds, and is entitled to hold, against the existing regime in the United States. The prophets of the American brand of capitalism exult almost indecently concerning our prosperity, and its bases in productive competence and "fair treatment" of the wage-earner. But they have yet to show the slightest sign of making good on their half of the bargain. It is easy to urge and to accept labor's cooperation in production, for increased productivity helps profits more quickly and more surely than it does wages. Yet, because public employment exchanges may increase labor's bargaining power, and because unemployment insurance may, for the time being, cost something, management will not hear of them—with scattering and creditable exceptions. Why does not Herbert Hoover or some other accredited leader of the intelligent business executives who aspire to more stabilized and efficient practices recognize this great lack and pledge, at least, a first step toward supplying it? Some time we may easily have another crisis of unemployment, accompanied, as such crises almost invariably are, by "overproduction." What will the rulers of industry then answer to labor if labor should say: "We have helped you to produce more and ever more; we have cast no obstacles in your way; and yet you have done nothing to prevent or alleviate the misery of unemployment which the larger production has caused?” What will be the end of labor's cooperation, if capital fails to extend this vital measure of cooperation in return?