There are several questions affecting the future of the type of public-works program represented by the Work Projects Administration. These questions all involve matters of fact, as well as of judgment and opinion, and should be susceptible of reasonable answers, without entering upon the realm of prophecy. I propose to answer briefly these questions both of fact and opinion.
Can we expect the war in Europe to bring about an American prosperity that will put the bulk of our unemployed to work in private industry?—At the outset of the war in Europe it was predicted by many persons that business in this country would increase so greatly as to put all our unemployed to work and make it unnecessary for us to have any Federal program of public employment in 1940 or 1941. I did not believe in these highly exaggerated notions of the benefits that could accrue to us from a European war, and early last fall I stated my disbelief very frankly over the radio. I gave the reasons why, in my judgment, we should expect business losses as well as business gains from a war in Europe; why we should expect severe dislocations in some industries; and why we could not expect a European war to solve our unemployment problems. And all that I then said has been justified by subsequent events. By March our early war boom appeared to have collapsed. Our increased wartime employment, which at its peak provided about a million new jobs in private industry, was due largely to a rush of production in the expectation of higher prices—an “inventory boom.” It seems pertinent to repeat here what I said last September, at the beginning of our short-lived wartime boom: We cannot found a sound American prosperity on the tragic sufferings of a European war. We should rather seek to protect our economy from the inevitably disastrous consequences of that war. Whether it is a short war or a long war, it will be followed by profound economic disorder in Europe, and perhaps by economic collapse. The more we rely on war business to help us, the more serious will be the economic dislocation in this country when that war business suddenly stops.
Our democracy will be more secure, if the economic and social well-being of this country is grounded on the making of things for our own citizens to use and enjoy—and not on the misfortunes of Europe. Our American economy needs to strengthen itself on its own basis right here at home. We need to continue the work we have begun, and in which we have made good progress in the last seven years—that of creating a sound national economy in which there are fair wages, fair prices, and fair profits. It is in this direction that true prosperity lies.
Can normal business recovery within the next few years diminish our present large-scale unemployment to such an extent as to make unnecessary a large-scale public-works program?—In my opinion, such complete recovery cannot be expected within the next two or three years. The creation of a solid and enduring American prosperity will require patient and courageous effort over a longer period. It will take more than a few years to make the economic adjustments that will be needed to do away with large-scale unemployment. The case can be put very simply. Our industrial production, during the month of December 1939, equaled and even surpassed the 1929 level. But we still had nine to ten million unemployed, whereas in 1929 we had an average of about two million. Why?
For one thing, we have in the meantime increased our labor supply by six and a half million workers since 1929. And at the same time, we have improved our machinery to such an extent that it now takes fewer workers to produce the same amount of goods as in 1929. In order to put our millions of unemployed to work, we must produce far more goods of every kind than we did in 1929—and get them into the hands of consumers.
In the past the motive force which makes for the expansion of production and employment has come from new investment, from the construction of a productive plant, particularly in new industries. Economists are generally agreed that there is now a lag in such investment. We have built up our productive plant to a point at which for the moment it does not offer many new opportunities for profitable investment. Also, no new industries requiring huge capital investment are for the moment on the horizon. All this does not mean that we have reached a dead end in our industrial development; on the contrary, we are entering upon a new phase of industrial development.
We produced in 1929, and we produce now, goods chiefly for the limited market represented by the higher and middle income groups. But there remains the vast market of the low income groups. In the process of developing this vast domestic market, many adjustments will no doubt have to be made—price adjustments, wage adjustments, interest adjustments. It will require a rising standard of living to provide an indefinitely extending market for the fruits of our expanding productive capacity. And here, in this field of production of goods and services for our home market, lies also the opportunity for new investment in the future.
The new business prospects that are just opening up in this country are described in plain and simple terms in the last annual report of the Secretary of Commerce. It is obvious that the cultivation of these new industrial opportunities will take time. And in the meantime our unemployed should not be left to starve or to remain in idleness.
While large-scale unemployment persists, can public works done by the contract method provide sufficient employment to meet the situation?—No. Unemployment must be met where and when it exists—not elsewhere or later. A public employment program designed to relieve the distress due to unemployment must provide a maximum of work for the particular jobless and needy workers in each locality. This work must be of kinds suitable to the training and experience of the unemployed. And the work must be provided quickly.
Contract public works, even though extensive in scope, are necessarily slow in getting under way. Contracts must be awarded after the customary open competition, and the work naturally proceeds at the times and seasons most favorable for such work. This normal method, although valuable in the long run, cannot be geared to meet the sudden emergencies of mass unemployment that arise at some particular time and in some particular place, as a result of the unpredictable shutting down of some local private industry. Sudden unemployment emergencies are characteristic of modern industry. In Detroit, for example, in the winter of 1937-38, thirty thousand men were discharged overnight from one motor plant; and in that city unemployment increased by one hundred thousand within two months. Later these automobile workers were hired back with almost the same suddenness. Contract public works cannot meet this typical situation at either juncture.
Moreover, a large part of our private industry is seasonal in its nature, and there is likely to be an increase in unemployment at precisely those times and seasons least favorable for normal public construction work. It is also obvious that heavy construction, the traditional kind of public works, does not provide a sufficiently wide variety of employment to take care of many of our unemployed workers. Except to some extent in engineering and drafting, it provides little or no employment for white-collar workers, and practically none for women. For all these reasons it became obvious, in 1933, that the familiar kinds of public works would have to be reinforced by some new type of program to meet the emergencies of mass unemployment. The new program would have to be broader in scope in the kinds of work provided. And above all it would have to be flexible—it would have to be a kind of public-works program which could be set up without delay in any locality, and just as rapidly cut down when private jobs were available to its workers.
Quick action is the essence of the W.P.A. type of program. It does not in the least diminish the need for more fundamental and slow-moving action which will stimulate private industry and provide private jobs in the long run. The long-run method has many basic merits. I certainly advocate its continuance. But our unemployed cannot wait until the slower-moving public-works programs produce their full effect. We have to provide public work for the unemployed when they need it, by some such quick and flexible work program as that of the W.P.A.
Would it be more efficient and more economical to “return relief to the states”?—What this proposal actually means is to pay over Federal relief funds to the states, to be expended there under state and local control—upon their own local work programs or on direct relief, or both, as they may see fit.
This, in my opinion, would be a serious backward step. We tried out the system of making grants of Federal relief funds to the state’s for their work and direct relief programs, and found that it had serious disadvantages. Without Federal control there can be no effective central planning, no coordination, no uniform procedures, no maintenance of adequate standards. As now proposed, with a fixed method of distributing relief funds to the states, the system lacks flexibility—funds once apportioned in advance to a state could not be used elsewhere even if a greater need for them arose elsewhere. And it should be apparent that a return to state and local control would greatly increase the intrusions of politics into relief.
But would it be more economical to return work relief to the states? It has been claimed by some proponents that state and local control would save two-thirds of our present W.P.A. costs. We must therefore ask, what would those savings come out of? Our current man-month expense on the W.P.A. is as follows: $54.25 goes for wages to project workers; $5.75 goes for materials; and $2.00 for administrative expense. Our administrative expense is so small that state control could not possibly make any savings there.
Savings might be made by spending little or nothing on materials and equipment. But such a program would be unable to construct substantial public improvements; it would necessarily deteriorate into a leaf-raking and maintenance program. I am unable to regard this as economy, nor do I believe that the American public would regard as economy a kind of program which deprived their communities of the solid and enduring public improvements now being made by the unemployed through our present W.P.A. program.
Nearly all of our W.P.A. funds (over eighty-seven per cent) go into wages for the project workers; and if any large savings are to be made in the costs of the program, heavy cuts will have to be made in W.P.A. wages. The promise of large savings under state and local control is a threat to reduce the relatively low W.P.A. wages far below the subsistence level. I don’t believe the American people want W.P.A. workers and their families to starve in the name of economy.
Should we abandon the policy of providing public work for our able-bodied unemployed, and put them on a dole?—I do not think that we should, and I have ample reason for believing that the great majority of the American people agrees with me. Every poll on this subject has shown a great preponderance of public opinion in favor of work over a dole for our needy unemployed. To keep able-bodied and willing workers in idleness on a dole is not our American way of dealing with the unemployment problem—nor is it our way in dealing with human beings, either. We have too much respect, both for work and for human beings, to keep them apart.
Does work relief, because of possible manipulation for political purposes, constitute a danger to our institutions? I have never been able to take seriously the idea that W.P.A. workers as a mass could be controlled politically and used or misused on a national scale in elections. If anybody has ever thought so, it was because he knows nothing whatever about W.P.A. workers. Actual political threats or promises to needy voters, in and out of the W.P.A., are and always have been local in character. I am glad that there now exists adequate legal protection of W.P.A. workers against political influences. I refer to the definite provisions in the law under which we operate, and also to the more recent Hatch Act. These laws are specifically designed to protect W.P.A. workers from political threats or promises in connection with their jobs. They are intended to prevent any form of political coercion of W.P.A. workers by anybody in or out of the W.P.A. My duty in respect to these congressional laws is clear. As Commissioner of the Work Projects Administra- j tion I shall not tolerate any violation of them.
The W.P.A. program concerns itself directly with more than two and a quarter million workers. I do not say that isolated instances of coercion or attempted coercion will not occur. Charges of politics in the W.P.A. will, no doubt, continue to be made—sometimes loosely and vaguely and without any attempt at specific substantiation, as might naturally be expected in an election year; but in certain cases such charges may be true. And I have urged all who hear of charges of that kind, which they believe to be true, to bring them to my attention or to the attention of the Department of Justice, so that the guilty parties may be punished.
In this connection, and as an illustration of our own administrative efforts in the direction of keeping politics out of the W.P.A., I quote the following letter, sent by the W.P.A. administrator in Louisiana to each W.P.A. worker, before the last run-off primary:
“Before the first Democratic primary election last month I advised you of certain regulations pertaining to political activity. I wish to remind you now that these regulations are still in force. They must be obeyed. The W.P.A. is not supporting any candidates for any office. You are not under obligation to vote for or against any candidates. If you are qualified you can vote as you please. No one can threaten to have you fired for any political reason. No one can promise you a better W.P.A. job in return for your support. No one can ask you for money for any political campaign. This is against the law. If you supervise the work of others and if you are a teacher in the adult education program or a recreation worker you must not be politically active on or off the job. You must not use your influence to get votes for any candidates or otherwise help any candidate for any office. If you are a W.P.A. security worker without supervisory duties you must not talk politics on the job or on the project site. You are employed by the United States Government and your job does not depend upon the outcome of any election in Louisiana. You do not owe your job to politics—you will not lose it because of your vote.”
Why should we go on supporting W.P.A. workers?—Because we get our money’s worth in the results of their work. We get new and improved roads, bridges, schools, hospitals, parks, airports, water mains, sewer systems, and a wide variety of socially useful public services in such fields as those of health, recreation, and education. And it should be remembered that while the nation is supporting the W.P.A. workers by paying them security wages, the W.P.A. workers are at the same time helping to support the rest of the nation by spending their wages. That is a feature of our program which should not be overlooked in any consideration of its economic usefulness. The wages that are paid to W.P.A. workers are quickly spent for the necessities of life. The W.P.A. dollar is probably the fastest moving dollar in our entire economy. It flows back quickly to the factories and the farms of the nation. I have some figures which show approximately how W.P.A. workers have spent their wages. The National Resources Committee has worked out the percentages of expenditure for various items in the wage-group to which W.P.A. workers chiefly belong—that is to say, the $500-to-$750-a-year income group. By applying these percentages to W.P.A. wage expenditures, we get the figures I use here for the purpose of illustration.
Our total W.P.A. wage payments in the whole United States from the beginning of our program in July 1935, through December 1939, have amounted to $6,255,000,000. And out of these W.P.A. wages, the grocers, the butchers, and the bakers of the country received about $2,630,000,000. The landlords received, as rent, about $1,250,000,000. For all the various costs of household operation, W.P.A. customers spent about $625,000,000. The clothing stores of the country received about $563,000,000. For transportation, W.P.A. workers and their families spent about $312,000,-000. The doctors, dentists, and hospitals of the country were paid about $250,000,000 out of W.P.A. wages. Miscellaneous W.P.A. expenditures amounted to about $625,000,000.
I do not think I need emphasize further the importance of these W.P.A. customers and W.P.A. wages in the expansion of business activity. An adequate work program pays for itself, both through the improvements that it creates, and through the effects of its expenditures on the business of the nation.
Have our emergency public-works programs already done so much work that there is little or nothing left for the unemployed to do?—No; that view is based upon ignorance of the vastness of our needs. Actually we are far from having caught up with the accumulated needs of our communities for public improvements.
Over a year ago a national conference of health experts met in Washington and recommended a ten-year program of hospital construction, preventive medicine, and medical aid to the needy which would involve expenditures rising gradually from some $50,000,000 a year to approximately $800,000,000 by the end of the ten-year period. There is nothing Utopian or academic about the proposals put forth by the conference. The expenditure involved would, according to all well-informed persons in the field, be a sound investment in better national health.
Hundreds of sewer systems and sewage disposal plants are urgently required. We still need thousands of school-houses to replace obsolete and inadequate structures. There is still need for a great deal of work to be done in the improvement of our roads and recreational facilities. And when we come to urgently needed work in the conservation of our natural resources, we find a vast and long-term program waiting for us. This year, for the first time, Congress has authorized us to operate projects “sponsored by conservation districts . . . duly organized under state law for soil erosion control and conservation. . . .” In several states the W.P.A. has begun to cooperate with the newly established soil conservation districts in doing the work necessary to save the topsoil on our farms. Most of the states are now organizing such soil conservation districts and the unemployed can be set to doing this work. An adequate program will take from twenty to thirty years to complete. In short, there is no lack of useful work for our unemployed to do.
Looking backward over the period from July 1935 to the present, it is clear that a higher efficiency could have been achieved had there been plans and financial arrangements covering this period. But if we look back we can see why no such long-range plans were made. It was because the American people did not fully or definitely realize that a long-term problem existed. Many people believed that an increase in business prosperity would take up the slack of unemployment within a very short time, so that a large-scale Federal work program would be unnecessary.
The unemployment situation is now clearer, I think, to most of us. As the President said in his congressional message of April 27, 1939, on work relief: “In any consideration of the problem of unemployment relief it must be borne in mind that the program adopted to meet it must be envisioned to extend over a considerable period of time. The reason for this is that this nation, in common with the entire world, is undergoing a process of readjustment, particularly in connection with the production and distribution of goods. Until our economic machinery can be realigned to meet present-day conditions, the problem of unemployment will persist and the measures adopted to deal with it must, therefore, be carefully thought out and their operation planned to extend well into the future.”