That does not mean that there will not be somewhat more women in the labor force after the return to more stable conditions than was true in the past. During the last war we had a big bulge in the number of women employed and also younger people, but after 2 or 3 years we found that, while there were somewhat more women than before, it was a normal increase in the number of women employed in industry.

So we believe that this wartime bulge will be gradually eliminated and that there will be resumption of the normal rate of increase of women in industry, possibly a little more-although the last time did not show any definite acceleration after the stabilization had occurred. (2) We assume that the armed services for a few years will remain as high as 1,500,000. Now, it might be more than that. It is hardly likely to be less than that at the end of this transition period, with world stabilization and control of the situation of paramount importance.

With these assumptions, the post-war civilian labor force would be about 57,000,000 if you project forward to, say, the close of the transition period.

Senator TAFT. On that assumption will you send many boys back to school?

Dr. MOULTON. Yes. During the war we have a bulge in the labor force and a dip in the colleges and schools. After the war we will have a bulge for a while in the schools and a dip in the labor forces, and when you get beyond that you are back to what you may call the normal growth situation with respect to the number of young people in the labor force.

The total number of jobs required for a satisfactory employment situation would be considerably less than 57,000,000. I think it is extremely important that we keep this clearly in mind in gaging the level of employment that we would need. The number normally out of work in good times will be at least 3,000,000. This makes allowance for the unemployables, for prolonged sickness, normal shifting from job to job, seasonal fluctuations, and minor industrial fluctuations affecting special industries and particular localities. I don't include mass unemployment resulting from depressions of severe character.

Let me call attention to the fact that this estimate of 3,000,000 unemployed is conservative.

Senator AUSTIN. May I ask a question?

Dr. MOULTON. Please do.

Senator AUSTIN. I don't clearly understand what you mean by "makes allowance" for all those.

Dr. MOULTON. The 3,000,000 includes unemployables. You see, 57,000,000 is the total peacetime civilian labor force. Not all of those will be seeking jobs or will have to have jobs provided for them continuously year round. If a census of employment is taken, on any given day in the year there will always be many shifting from job to job. There must necessarily be this shifting in a country as large and as diversified and dynamic as ours.

Senator TAFT. People will be taking trips to Florida and Alaska. Dr. MOULTON. Yes. If they are just on vacation they are counted as job holders. If they are between occupations that is another matter.

Sir William Beveridge has estimated that in England the percentage that is normally out of work in a flexible society in which technological changes are occurring, and in which labor has the right to quit jobs and seek other jobs runs as high as 8.5 percent. We took a smaller percentage than that. Six percent of the 57,000,000 would be 3,400,000. We have taken a little less than 6 percent for this.

What we are saying here is that if we had 54,000,000 employed we would have what we would call a very satisfactory labor situation. Unemployment figures for 1929 are none too precise, but the estimates run from 2 to 3%1⁄2 million. For the most part, these unemployed are not people who are storming the gates in search of jobs immediately, who have to be cared for because they are an unfortunate lot. These are people in the main who are temporarily out because of their own desire to better their job or because of temporary seasonal fluctuations and minor industrial changes.

In 1943, when we had the greatest labor demand in our history, there were roughly a million listed as unemployed. There is an irreducible minimum even in wartime. We would not have a healthy society if we didn't have a shifting of people from jobs. You wouldn't have a healthy society unless you had some industries growing rapidly and others declining. We have taken a conservative unemployment figure a more conservative figure than Sir William Beveridge has used-in order not to put this in a rosy light. In our statement we say that at least 3,000,000 can be counted as not working at any one moment of time.

If you take 54,000,000 as representing a satisfactory, healthy employment situation, how many more jobs would be necessary than we had in 1940? In 1940 we had 46,000,000 employed, and in 1947, say, we would have to have 8,000,000 more employed. Now, this 8,000,000 we are talking about is not necessarily the volume of unemployed that we have to cope with here. Jobs for 8,000,000 is the additional employment needed if the situation is to be reasonably satisfactory. That raises the question: Is there any reason for believing that, without Government projects, we would have more or less employment opportunities than was the case in 1940? Now, I would say to that question we will have many more.

Senator TAFT. Dr. Moulton, don't we have in this country something like 35,000,000 family units?

Dr. MOULTON. Yes, something like that.

Senator TAFT. And how many single people besides? Are there any figures on it?

Dr. MOULTON. I haven't checked that lately.

Senator TAFT. Fifty-four million jobs means two jobs in a great many families.

Dr. MOULTON. Yes.

Senator TAFT. Millions of families.

Dr. MOULTON. Oh, yes; that is right.

Senator TAFT. I don't suppose there is any way to divide it.

Dr. MOULTON. No, we can't divide that, but that is a factor worth noting.

Senator TAFT. It has occurred to me, when you talk about inequality, the greatest inequality exists today between the family where two people are working and the family where one person is working.

Dr. MOULTON. Yes.

Now, employment of 8,000,000 more than in 1940 is what I would call the problem with which we are faced. That will come either in private enterprise or in Government or both.

Looking at it from the standpoint of private enterprise first: Is there any reason for believing that employment will be more than in 1940? 1940 was a period of comparatively slack times. We were feeling here and there the impetus of the war in Europe, but as a matter of fact we still were on a somewhat subnormal basis.

Senator TAFT. What was the national income in 1940?

Dr. MOULTON. Seventy-seven billion net, on the 1940 price level. With allowance for price changes in the past 3 years that is equivalent to more than 100,000,000.

The question is: Is there now any reason for believing that the situation in the immediate post-war period will be such as to give us more employment than in 1940, without asking just how much more? Other analyses lead us to the conclusion that in this transition period we will have a very much higher level of activity than we had in 1940, because of the great unsatisfied wants which will exist. Bearing in mind the gradual character of the demobilization, if we can release raw materials as men discharged from the armed forces become available for civilian employment, and if the consumer demands may be counted on, as we think they can, to provide a market for expanding production in civilian lines, we see every reason for believing that we will have a higher level of activity than in 1940.

Senator VANDENBERG. Everything you are saying, I assume, is contingent upon successful, swift, and conclusive contract termination in respect ot war contracts?

Dr. MOULTON. Yes. We are assuming that that is behind us. Senator VANDENBERG. That is quite an assumption.

Dr. MOULTON. And also that the machinery for the disposal of surpluses is running satisfactorily. If you had something that paralyzed the spirit of enterprise during this period, there would be a different picture.

Senator HAWKES. Mr. Moulton, I agree with you that this pent-up demand will bring private enterprise into great activity and create a great many new jobs over and above 1940 if we can do these other things. You may have covered this before I came in, but don't you think it is vitally important that the Government should not step in and create increased employment in the beginning, when private enterprise can give that employment, but rather hold what it has in reserve to come in later?

Dr. MOULTON. Yes. I haven't mentioned that, but I would subscribe to the proposition. If our analysis is sound, there is reason for believing that we will have an expanded total of private employment. Now, we can't be sure that that is going to provide 8,000,000 additional jobs. Therefore it is necessary to have this reserve of public works. But I wouldn't start with the assumption that you have to do that first.

Senator HAWKES. That is my point. It should be held in reserve and used to fill in.

Dr. MOULTON. I should say it should be utilized in conjunction with and to the extent necessary. As you go beyond the 2 years, into the third and fourth years, you might have a situation not so favorable, in which public works as a reserve would be much more important

than it would in this first peroid. In other words, it ought to be dovetailed with the requirements of employment as determined by the extent of private activity.

Senator HAWKES. That is the thought I had in mind. In other words, close dovetailing in there is very important.

Dr. MOULTON. What I am trying to emphasize here is that, as we we have analyzed this problem, without having in advance any assumption in our own minds as to where we could come out on this, we have ourselves reached the conclusion that the magnitude of this unemployment problem has been very greatly exaggerated by virtue of the inclusion of a lot of people who aren't going to be discharged from their jobs at all, but will continue to work where they are, and, secondly, that the volume of industrial production, assuming a fairly healthy climate, is very likely to be large enough to make our unemployment problem in this transition period much less serious than it has been during most of the thirties.

Bear in mind that there will still be, on the average, say, 8 or 9 millions in the armed forces during the first year. It won't be until the end of that 21⁄2 year period that you will get this down to the million and a half men in military services, and that million and a half compares with 300,000 that we had in normal times. On the average, during this 22-year period, there would be something like 5,000,000 still in the armed forces-this at a time when both war production and expanding civilian production, as materials are realized and as manpower becomes available, will be on a high plane. I personally do not anticipate in that portion of the transition period any great unemployment generally.

I can see great difficulties, of course, if they close down the shipyards in a given area; there has to be a shift there. But thinking of the over-all picture, and recognizing that on the average during that 22-year period something like 5,000,000 people would be in the armed forces, and that our national production, some of which would be still devoted to the war program, some of which would be devoted to an expansion of civilian output in the areas where we have had curtailment, I think as far as that first immediate situation is concerned the employment outlook is very reassuring.

I would not conclude from that that we ought not to be prepared to meet emergency conditions-because we ought to be; but this does have a bearing upon the magnitude of the preparations that are presumably necessary.

The figures have been widely publicized in this country that something like 30,000,000 will be discharged. As I said before, there were included in this figure not only farm laborers but farm operators. However, these will not be discharged into the labor market-they will go right on producing food.

The CHAIRMAN. There may be an increase, as a matter of fact, in farm employment.

Dr. MOULTON. Yes.

The figures based on these several assumptions might be off in the range of 10 percent or so-I don't think any more-but nevertheless, they give a fair perspective of the additional employment requirements for labor.

The 8,000,000 we are talking about is as of the end of the period, not the average during it.

Mr. RUSSELL. That would be variable, wouldn't it, Doctor, at all times the number in the armed forces?

Dr. MOULTON. Oh, yes. There will be a gradual reduction. I just gave an average figure there. If you would work it out in the year 1945, assuming the war ended this year, the average would be over 8 or 9 million. In the year 1946 it would run down to-the average might be 6 or 5. Then, the last year, of course, it would be 22 or 3, getting down finally to the million and a half.

The CHAIRMAN. Any questions? Senator Hawkes, any further questions?

Senator HAWKES. No. I was a little late in getting here. I am sorry I had to be late. But I think your statement is very enlightening. You have so many variable factors in here that all you can do is to make the best plan that is humanly possible.

Dr. MOULTON. Yes, and allow for a margin of error there. Senator HAWKES. I am very much inclined to agree with you, Dr. Moulton, that the thing is not as hopeless as a good many people think it is. I think you have a tremendous demand for materials, and if you have a Government that fosters private enterprise and does not break the mainspring and we find ways to permit the people to buy, I am certain we are going to have tremendous employment after the war.

I would like to emphasize again, Dr. Moulton, the fact it is a very difficult thing to do-but I think we ought to devote ourselves to trying to see that the Government does not use up forces it may have to use before it is time to use them, and create an unsound condition of employment, and then find that we have, as they say out West, shot our bolt and haven't anything left.

Dr. MOULTON. I want to supplement, really, what you are saying there by this final statement, that this comparative optimism with respect to the transition period does not mean that I have equal optimism with respect to the third and fourth and fifth years. You see, this bulge of activity results from the large unsatisfied wants. That is where we square away. I am confining this for the moment to the 2-year period, or 22-year period, which we have to get through first, and we need to gage its requirements and difficulties first.

The CHAIRMAN. It may be much more acute after you do square

away.

Dr. MOULTON. Well, one favorable factor that we have in this 2-year period won't be there, namely, this filling of the void created by the wartime cessation of production. That, certainly, we know, won't be there. Now, the problems involved in getting an enduring basis for prosperity involve some different issues, which I am not interested in discussing this morning.

The CHAIRMAN. Mr. Russell, are there any questions you wish to ask?

Mr. RUSSELL. My only question, Senator, would be directed to the assumptions, and Dr Moulton recognizes that there may be some errors in those.

Dr. MOULTON. Yes. We don't know that the war is going to end in December 1944, or that there is going to be a 12-month interval, but after discussing this with military people we reached the conclusion that that is a better assumption about the year's lag than the opposite would be. That is all we can say.