The impact of automation on jobs has become one of America’s most pressing economic issues. “The problem we shall have to face some time,” the Nation concluded, “is that the working force is expansive, while latter-day industrial technology is contractive of man-hours.”ĭecades later, many of the same concerns have resurfaced. The boom gave work while it lasted, but the improved machinery requires fewer man-hours per unit of output.” This conundrum, moreover, would outlast present conditions and become even more apparent in an economy that was supposed to accommodate 1 million new job seekers every year. “A part of the current unemployment … is due to the automation component of the capital-goods’ boom which preceded the recession. The Nation termed it an “Automation Depression.” “We are stumbling blindly into the automation era with no concept or plan to reconcile the need of workers for income and the need of business for cost-cutting and worker-displacing innovations,” the magazine said in November 1958.
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“The law of supply and demand-the free enterprise system-is working now as it was supposed to work.”īut some suspected that something else was going on, something structural and not just cyclical.
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The Committee for Economic Development, a liberal-leaning business group that had been started toward the end of World War II to promote job creation, called it “one of the long series in the wave-like movement that has been characteristic of our economic growth.” Kenneth McFarland, a consultant for General Motors, agreed. Things got so bad for Studebaker-Packard, the automaker, that it made a shocking announcement: It would no longer honor its pension obligations for more than 3,000 workers, handing an “I told you so” moment to those who’d been warning about the fragility of retirement promises.Īs painful as the recession was, to many it was all part of the natural business cycle: a chance for manufacturers to pare down inventories that had become bloated earlier in the decade, to pull back on investments that had gotten overbuilt and to adapt to a shrinking export market. General Electric alone had sent home some 25,000 production workers by the summer of ’58 General Motors, 28,000.
By July, the national unemployment rate hit 7.5 percent. In Peoria and across the nation, things got steadily worse. “But it’s under the surface for everybody.” “Trouble is already here for some people,” said one Caterpillar worker. Caterpillar, the heavy equipment maker and the big provider of jobs in town, had already laid off 6,000 workers and cut back to a 4-day week. In January 1958, Life magazine visited Peoria, Illinois, and found the mood there to be gloomy. The latest downturn, which began in the summer of 1957, turned serious by winter.
There had been other recessions, from 1948 to 1949 and from 1953 to 1954, but they were less severe. In 1958, America found itself in the midst of its worst economic slump since the Great Depression. He is a former reporter and editor at the Wall Street Journal and the Los Angeles Times and the author of The End of Loyalty: The Rise and Fall of Good Jobs in America. Rick Wartzman is a senior adviser at the Drucker Institute in Los Angeles.
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