Training for Jobs

July 6, 1964

Almost everybody knows that if a commodity is overpriced some of it will remain unsold. But hardly anyone except a few economists—certainly no union leader or politician—seems willing to recognize that wherever labor is overpriced some of it will remain unemployed.

Because this basic cause of unemployment is unrecognized or unacknowledged, union leaders and politicians blame the bulk of it on other alleged causes. The two most popular scapegoats today are “automation” and lack of training.

The automation scapegoat is by far the more frequent. We are constantly being told that it has created a huge army of “permanent jobless.” The unemployment statistics do not support this. Out of 4.3 million unemployed in March, for example, fewer than 600,000 were unemployed for more than six months. This means that fewer than one in seven of the unemployed, and only one in every 130 persons in the total potential labor force of persons 14 years of age and over, was out of work for more than six months. The total number of employed persons in the U.S. has been rising each month to new high records. “Automation,” in the long run, creates as many jobs as it destroys.

NEW BUGABOO

But recently a new bugaboo has been getting the blame for “permanent” unemployment. This is lack of training and lack of special skills. This is a real cause of temporary unemployment. But it is not in itself a cause of permanent unemployment. Nor is there any good reason for supposing that it is a greater cause even of temporary unemployment than it has been in the past. Yet both allegations are constantly being made. Quite recently James R. Dumpson, welfare commissioner of New York City, declared:

“The kind of unemployment we now have is the kind that isn’t eliminated by an expanding economy. The jobs that economic expansion produces go begging as far as the unemployed are concerned, because they cannot fill them. The economy has moved on—and passed them by.”

Such statements are refuted by the statistics just cited. Six out of seven of the unemployed get new jobs within six months; three out of four get new jobs within fifteen weeks.

It is true that the highest percentage of present unemployment (averaging 5.3 percent in April) is found among youths of 14 to 19 (16.3 percent) and among non-whites (9.6 percent). But a large part of the blame for this must be put on a minimum legal wage which makes it uneconomic to employ some of these people, who would otherwise be employed at a lower rate (which could still yield an income above the typical relief payment).

LEARNING BY DOING

The question remains of unemployment through lack of adequate training and skill. There is no good reason for thinking that the percentage of this unemployment would be substantially higher today (without the minimum-wage law) than in the past. At all times some industries are contracting while others are expanding. Some skills are being rendered useless while others are coming into demand. But before the minimum-wage laws and abuse of union power this situation was taken care of by the system of apprenticeship.

Apprenticeship has been well defined as “a contractual relationship between an employer and a worker under which the employer is obliged to instruct the worker, and the worker is to serve the employer, on stated terms.” It is learning by doing; it is on-the-job training; it is learning to swim in the water. Government training programs are no substitute for this. They are a burden on the taxpayer and far less helpful to the worker.

Apprenticeship can be encouraged mainly by removing the legal and union obstacles that have been put in its way. Minimum-wage requirements could be removed entirely from bona fide apprentices. And it may be pointed out that even government subsidies for on-the-job apprentices (though I do not necessarily advocate such subsidies) would be far less expensive, far more effective, and add to production more than relief or than present government work-training programs and those proposed in the anti-poverty bill.