REPORT OF THE HOLLAND SUBCOMMITTEE ON UNEMPLOY MENT AND THE IMPACT OF AUTOMATION SOURCES OF INFORMATION The Holland Subcommittee on Unemployment and the Impact of Automation of the House of Representatives Committee on Education and Labor held intensive public hearings beginning March 10, 1961 and ending April 25, 1961. In addition to many statements received from experts and incorporated into the record, personal testimony was heard from the following witnesses in this order: McDonald, David J., president, United Steelworkers of America. Diebold, John, president, John Diebold & Associates, Inc., management consultants. Greenberg, Leon, Chief, Division of Productivity and Technological Developments, Bureau of Labor Statistics, U.S. Department of Labor. Beirne, J. A., president, Communications Workers of America, AFL-CIO. Samuelson, Paul A., professor of economics, Massachusetts Institute of Technology. Sullivan, David, general president, Building Service Employees' International Union, AFL-CIO. Barkin, Solomon, director of research, Textile Workers Union of America, AFLCIO. Carey, James B., president, International Union of Electrical, Radio and Machine Workers, AFL-CIO. Crotty, Harold C., president, Brotherhood of Maintenance of Way Employees. Rainey, Glenn, professor of English, Georgia Institute of Technology. Faunce, W. A., assistant professor, Department of Sociology and Anthropology, Michigan State University. Gorman Patrick E., secretary-treasurer, Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO. Cooper, R. Conrad, executive vice president, personnel services, United States Steel Corp. Ruttenberg, Stanley, director of research, AFL-CIO. Coughlin, Howard, president, Office Employes International Union, AFL-CIO. Gibbons, H. J., executive vice president, International Brotherhood of Teamsters. Schmidt Emerson P., director, Economic Research Department, Chamber of Commerce of the United States. Denise, Malcolm L., vice president, labor relations, Ford Motor Co. Fitzgerald, Albert J., general president, United Electrical Radio and Machine Workers of America. Hayes A. J., international president, International Association of Machinists, AFL-CIO. Goldberg, Arthur J., Secretary of Labor, U.S. Department of Labor. Typically, the testimony from the witnesses, together with questions and answers, took from 2 to 3 hours each and sometimes longer. In addition, there were others who for one reason or another could not testify at the times that were available but who sent statements for inclusion in the record. These included: Reuther, Walter P., president, United Automobile Workers, AFL-CIO. Pacific Maritime Association and Longshoremen's Union (joint statement). Van Arsdale, Harry, Jr., president, New York City Central Labor Council, AFLCIO. The President's Council of Economic Advisers. Watson, Thomas J., Jr., president, IBM Corp. Robert R. Montgomery, Jr., president, Alliance of Independent Telephone Unions. Fox, Michael, president, Railway Employees' Department, AFL-CIO. Parker, J. S., vice president, General Electric Co. COORDINATION WITH OTHER AGENCIES Much study in the same area has preceded this one. First, there are the two volumes of hearings published on the effects of automation by the Joint Economic Committee in 1955 and 1960. Second, there are the 14 volumes of hearings of the Special Senate Committee on Unemployment Problems published March 30, 1960. The Special Committee on Unemployment Problems of the Senate in 1959-60 made about a hundred specific recommendations based on approximately 5,000 printed pages of testimony and other findings. It would be presumptuous of this subcommittee to ignore or attempt to duplicate the work of all of the previous studies on this subject. Rather the aim has been to supplement, not overlap or replace, previous efforts in this area. There was close coordination throughout with the staffs of the Subcommittee on Automation and Energy Resources of the Joint Economic Committee and the U.S. Senate Unemployment Committee. There was also coordination with agencies in the executive branch of the Government concerned with this problem of automation which has been authoritatively called the most important domestic issue in the United States today. Secretary of Labor Arthur J. Goldberg, who testified before the Holland subcommittee, has just created a special Office of Automation and Manpower in the U.S. Department of Labor. Furthermore, the Senate, this year for the first time, has established a permanent subcommittee to deal with this problem by making a continuing study of automation's impact, disseminating information concerning this critical national problem, and coordinating its efforts with the U.S. Department of Labor. The main emphasis of these hearings has been on action rather than additional research. Every witness was advised in advance that he would be asked not what has already happened but what should be done to alleviate an unemployment and displacement situation that is recognized by all as a most serious problem. Indeed the level of unemployment at this time is roughly double what it was when the Senate committee made its report. As might be expected, a variety of remedies was offered but there was a remarkable amount of agreement on the nature and importance of the problem. It was almost unanimously accepted, by management, labor, Government, and university representatives, that the present high level of unemployment is the most pressing domestic problem facing the American economy in 1961. MAJOR FINDINGS Automation is the third phase in the development of technology that began with the industrial revolution of the 18th century. First came mechanization, which created the factory system and separated labor and management in production. In the early 20th century, mass production brought the assembly line and other machinery so expensive that the ownership of industry had to be divorced from management and atomized into millions of separate shareholdings. Finally, since World War II, automation has added the elements of automatic control and decisionmaking, turning the factory from a haphazard collection of machines into a single, integrated unit and requiring production on an enormous scale. Mechanization was a technology based on forms and applications of power. Mass production was a technology based on principles of production organization. Automation is a technology based on communication and control. Automation is based on all of the principles of these three stages of technological growth. It embodies the mechanization of 18th century England, the continuous mass production principle of early 20th century United States, and the automatic control principles being put to use all over the industrialized world since the war. But automation is more than a technology. It is a concept of manufacturing. It requires that the entire productive process, from raw material to final product, be analyzed so that every operation contributes most efficiently to the achievement of the goals of the enterprise. For the purpose of analysis, automation can best be defined as any continuous and integrated operation of a production system that uses electronic or other equipment to regulate and coordinate the quantity and quality of production. In its broadest usage it includes both the manufacturing and administrative processes of a firm. Automation is the problem of the present and the promise of the future. It is the means whereby the conquest of natural forces can be opened to the abundant benefit of mankind. Automation is not something to be feared and avoided. It is something to be harnessed and encouraged. The means of accomplishing this noble end are worthy of intensive study at all levels of man's activity. Government obviously will have an important role to perform in this economic and social drama. The significant facts uncovered by the hearings of the Holland subcommittee fall into four categories. First is the necessity for technological change, including automation, if our country is to prosper and remain competitive; second, are the employment effects of electronic computers and data processing, called office automation; third are the effects of automatic assembly line and related automatic production systems, often called factory automation and sometimes Detroit automation; fourth are the economic effects of general technological changes, especially mechanization. A few representative facts and statistics brought out by the hearings have been classified under these four categories and are quoted below. NEED FOR TECHNOLOGICAL CHANGE, INCLUDING AUTOMATION Let me say at the outset that we in the Department of Labor regard automation and other technological advancement as an essential and desirable development for maintaining the strength of the U.S. economy. If we needed any reminder, the worldwide events of the last few weeks have recalled our attention to the fact that we must have a strong, progressive, and technologically powerful nation to meet the demands that press on us from outside our borders. We face growing economic competition from many countries-a competition that American industry has successfully met in the past by the imaginative and efficient use of new technology with the resultant large increases in productivity. As a people, we have benefited from technological change and rising productivity. In the past 50 years, for example, gross national product per capita, that is, the total of private and public goods and services available per person, has more than doubled. This happened with a large increase in population, with no change in the proportion of the population that had to go to work, and with a shorter workweek and more vacation time per worker. It was accomplished, obviously, because of the large increase in productivity. New industries have arisen during this time. New products and services have made for an easier way of life-the automobile, plastics, antibiotics, better homes, and travel are a few examples. All of this indicates why automation and other technological progress is so important to the American economy and why it may be necessary to step up the pace rather than tone it down (Arthur J. Goldberg, Secretary of Labor). Western Europe is pursuing automation aggressively. We are going to have to move very fast indeed in order to stay ahead in automation. I believe firmly that staying ahead in this technology is critical (John Diebold, president, John Diebold Associates). How does an enterprise become efficient and profitable? How does it stay efficient and profitable in an increasingly competitive world? First of all, it must produce a commodity that customers are willing to buy in considerable volume at a price that is in line with the prices of competitive products, and that yields a profit sufficient to attract investor capital. No company today can meet these goals without relying heavily on automation, defined again, in the broadest sense. To the extent that our economy automates, we will continue to have a sound basis for rising national income and a rising standard of living. To the extent that we fail to automate, nothing else we do can protect us from shrinking markets, economic stagnation, and continuing difficulty in finding work for every person who is willing and able to work (Malcolm L. Denise, vice president, labor relations, Ford Motor Co.). Since 1940 we estimate that more than 20,000 Illinois packinghouse workers have seen their jobs vanish. Essentially this happened because the Chicago plants of major packers, most of them built in the 1890's, were allowed to become ob solete. They could not match the efficiency of new plants built elsewhere (Patrick E. Gorman, secretary-treasurer, Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO). OFFICE AUTOMATION Computer Sciences, Inc., estimate that 10,000 computer installations will be made in the year 1961. Based on studies made by the Bureau of Labor Statistics, it is estimated that each computer will affect 140 jobs. It is, therefore, easily seen that in the year 1961, 1,400,000 workers will be affected by these new installations (Howard Coughlin, president, Office Employees International Union, AFL-CIO). BLS also indicated that 25 percent of the jobs affected will be eliminated. We, therefore, can anticipate that 350,000 white collar positions will be permanently abolished by virtue of computer installations in the year 1961. We can reasonably expect that the number of computer installations will multiply at a rate in excess of 10,000 installations per year. If, for example, the increasing number of firms entering this field (now 68) were able to double the number of installations in the year 1962, a minimum of 700,000 jobs would be abolished in that year in addition to the 350,000 which we estimate will be lost this year. This number will increase to gigantic proportions as additional installations are made (Coughlin). Solid state transistor generated computers no larger than an office desk are already in process. These newer computers require little space, are much more reasonable in price, and are available for medium and smaller businesses. Computer centers are springing up throughout the Nation. These centers are eliminating small office staffs overnight. It is a simple matter for a small company to use the computer centers and, at the same time, guarantee secrecy of confidential company information. Automation magazine, in its March 1961 issue, announced that self-service computer centers are now a reality. A do-it-yourself computer center has been opened in Los Angeles by Computermat, Inc. It operates along the same lines as a laundromat. The client solves his own engineering and scientific problems with a minimum of instruction. If assistance is needed, there is an experienced staff to help the client in the preparation of programs and in machine operation. An extensive library of programs and subroutines is also available. An IBM 1620 system which uses decimal arithmetic was selected for use in the center. The New York Times, in its March 15, 1961, edition, illustrated the use of two computer service centers in the financial district of the city. These two computer centers, maintained by IBM and RCA, offer for a fee all of the advantages of electronic data processing without requiring users to buy or rent computers or their related equipment. |