2d Session HISTORY OF EMPLOYMENT AND PARTS III AND IV-LOOKING AHEAD TO THE POSTWAR ECONOMY AND THE CONCEPT OF FULL EMPLOYMENT IN CONGRESS SUBCOMMITTEE ON EMPLOYMENT AND OF THE COMMITTEE ON LABOR AND UNITED STATES SENATE VOLUME 6 OF SELECTED READINGS IN EMPLOYMENT Printed for the use of the Committee on Labor and Public Welfare 27-419 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1965 For sale by the Superintendent of Documents, U.S. Government Printing Office The copyright material reproduced in this volume was printed with the kind consent of the copyright holders. Section 8, title 17, United States Code, provides: "The publication or republication by the Government, either separately or in a public document, of any material in which copyright is subsisting shall not be taken to cause any abridgment or annulment of the copyright or to authorize any use or appropriation of such copyright material without the consent of the copyright proprietor." III INTRODUCTION This volume is concerned with the formulation of U.S. employment policies following World War II. During the war, the excessive demands of the war effort had led to full employment and a variety of programs designed to promote the efficient use of the Nation's manpower. When the war ended there were many who were concerned about just how the Nation could make a smooth transition to a peacetime economy after the forced draft demands of wartime. This concern led to enactment of the historic Employment Act of 1946. At the same time, the Congress also enacted one of the finest pieces of manpower legislation by approving a GI bill of rights which helped finance an education for the returning veterans. Sponsors of the legislation did not, of course, think of it in this way. To them, the GI bill was a partial payment to the veterans for the sacrifices they had made for their country. Its impact, however, has been profound in the development of the Nation's new labor force. Not until the late 1950's when rising unemployment and the launching of sputnik dramatized critical shortages of high talent manpower in the United States was attention again directed toward manpower considerations as an element of employment policy. Materials related to wartime manpower programs, the GI bill, and the development of postwar manpower policy will appear in a subsequent volume of this series. This volume starts with a full employment proposal for the postwar period prepared by the National Resources Planning Board in 1941, which was closer to the end of the depression than to the end of the war. If things are left to work themselves out, what happens to the demobilized workers and veterans and their families? *** Will the national income drop $15 billion or so as soon as pent-up demands are met? Will the succeeding drop in consumption throw others out of work, and reduce national production another $10 to $20 billion? If so, we shall be back again in the valley of depression. The two articles by George Soule cover an appraisal of the problems which would attend the shift from war to peace, how they were related to the views of Keynes, and the policies which would be needed to meet anticipated problems. According to Harvard Economist Sumner Slichter, writing in 1942: The problem of maintaining employment after the war falls into two principal parts: (1) the problem of transition, of shifting from a huge rate of Government spending back to private spending, and (2) the longrun problem of keeping busy a far larger and more productive plant than ever before. This article is of more than passing interest because it expressed a recognition of the wartime boost to training of the labor force. "After the War-Full Employment" is a revision of "After Defense-What?" by Alvin H. Hansen, then a leading exponent of Keynesian economic thought and approaches to policy in the United States. He posed |