NATIONAL DEFENSE MIGRATION TUESDAY, SEPTEMBER 23, 1941 HOUSE OF REPRESENTATIVES, AFTERNOON SESSION The committee met at 2 o'clock p. m. The CHAIRMAN. The committee will please come to order. TESTIMONY OF PAUL L. STANCHFIELD, CHIEF OF RESEARCH, Mr. CURTIS. Mr. Stanchfield, will you give your full name to the reporter, please? Mr. STANCHFIELD. Paul L. Stanchfield. Mr. CURTIS. And your position? Mr. STANCHFIELD. Chief of Research, Statistics and Planning Section, Michigan Unemployment Compensation Commission. Mr. CURTIS. You appeared before this committee once before, did you not? Mr. STANCHFIELD. Yes, sir; I saw you in Chicago.1 Mr. CURTIS. Mr. Stanchfield, you have prepared a valuable and detailed statement. (The statement referred to above is as follows:) STATEMENT BY PAUL L. STANCHFIELD, CHIEF OF RESEARCH, STATISTICS AND PLANNING SECTION, MICHIGAN UNEMPLOYMENT COMPENSATION COMMISSION DEFENSE MIGRATION IN MICHIGAN PAST PATTERNS OF MIGRATION AND FUTURE PROBLEMS RESULTING FROM PRODUCTION QUOTAS AND PRIORITIES This report presents selected data on the extent and character of migration which has already occurred in Michigan as a result of the defense program, and a discussion of future migration problems which may result from dislocation of labor caused by automobile production quotas, material shortages, or other factors related to the defense program. As background material, the report also discusses the normal migration pattern of Michigan industrial workers, and the character and location of Michigan's industries. The rapidly growing mass production industries of Detroit and other manufacturing centers have in the past drawn a considerable part of their labor supply 1 Mr. Stanchfield testified on August 21, 1940. See Chicago hearings, pp. 1195-1215. from rural Michigan and from other States. Between 1920 and 1930, the population of four principal automobile manufacturing counties increased by more than 400 percent. Most other industrial counties also grew rapidly. In the same period most of the counties in the cut-over area and the Upper Peninsula were losing population by migration. The expanding industrial centers also drew workers from other States and from foreign countries-so that in 1930 nearly a quarter of Michigan's residents were natives of other States, and nearly one-fifth were foreign born. Prior to 1910, most of the migration into Michigan was from the East, but since then the Southern States have been an important source of labor. In depression periods, the trend of migration is reversed, with industrial workers moving back to the rural areas of Michigan or to other States. This type of movement is reflected in unemployment compensation claims filed in other States against the Michigan fund by former Michigan workers. In 1939, about 20,000 individuals filed such claims and only about 20 percent of these involved movement to adjacent States, while 80 percent were in nonadjacent States. A relatively large part of the interstate claimants moved from Michigan to States in the Appalachian area (Kentucky, Tennessee, Pennsylvania, and West Virginia). New York, California, and Missouri also were important. IMPACT OF AUTOMOBILE PRODUCTION QUOTAS The impact of passenger car production quotas will be felt severely in Michigan because of the predominance of the automobile industry in the State's economie structure. Nearly two-thirds of the 1,250,000 workers covered by the Michigan Unemployment Compensation Act are employed in manufacturing. The automobile industry, together with steel, machinery manufacturing, and other industries related to automobile production, employ more than three-quarters of all manufacturing wage-earners in Michigan, and almost half the total number covered by unemployment compensation. The predominance of the motor industry is even greater in Detroit and other important cities. Nearly four-fifths of Wayne County's industrial workers are engaged in production of automobiles, bodies, and parts, or in closely related industries. The motor industry furnishes nearly all of the factory jobs in Flint and Pontiac, and well over half the manufacturing employment in Lansing and Saginaw. Outside these five cities, the direct impact of automobile quotas will be less severe, but serious dislocation of labor may result from interruptions of civilian production which may be caused by material and equipment shortages in such cities as Grand Rapids, Kalamazoo, Battle Creek, and Jackson. Some of the State's smaller cities, dependent in some cases on a single nondefense industry, may experience serious crises as civilian production is curtailed. With primary defense contracts amounting to more than 11⁄2 billion dollars, and subcontracts and indirect defense work bringing the total close to $4,000,000,000, Michigan's industrial centers will play a major role in defense production. New job opportunities in defense industries, and boom-time production in consumers goods industries, have led to considerable migration of workers to Detroit and other industrial centers in the past year. Over 26,000 of the 108,000 workers who filed new applications for work at Detroit employment offices in the 13 months ending August 1941 were last employed outside the Detroit area. The number of migrant applicants has increased steadily during the 13-month period. The total of 26,300 includes about 7,100 workers from other parts of Michigan, 5,800 from the Great Lakes area, 5,100 from the South, 4,100 from eastern States, 3,700 from States west of the Mississippi, and about 500 from foreign countries, including Canada. COMPENSATION CLAIMS AS EVIDENCE OF MIGRATION Less than 18 percent of the migrant applicants were skilled workers, while about half of them had occupational backgrounds which appear unsuitable for defense employment, including unskilled, service, clerical, sales, and agricultural occupations. Other evidences of migration are found in initial claims for unemployment compensation filed by workers previously employed in other States, which increased by 21 percent from 1940 to 1941, while intrastate claims were declining sharply. Almost all of the increase in interstate claims was in industrial centers in the southeastern section of the State. Wage records of the Unemployment Compensation Commission show that a total of 66,000 workers who first obtained their social security numbers in other States, but were not employed in Michigan in the first quarter of 1940, earned wages in covered employment in Michigan later in 1940 or in the first quarter of 1941. Of these, 45 percent came from Great Lakes States, 18 percent from the Middle Atlantic States, 9 percent from the South Central States, 7 percent from the South Atlantic States, and 13 percent from the Plains States. Other areasthe Pacific Coast, Mountain, and New England States-were of relatively minor importance. In addition to the Detroit area, employment offices in Flint, Saginaw, Pontiac, and other centers in southeastern Michigan have reported a more or less continuous influx of migrants from other States or from other parts of Michigan. Muskegon, with a high volume of defense work, has drawn workers from Grand Rapids and northern Michigan. Areas in Michigan from which workers have migrated include the Upper Peninsula and the cut-over area. While most of the migrants have sought work in southern Michigan industrial areas, some miners from the Upper Peninsula have gone to other States. Some of the less active industrial centers, such as Kalamazoo and Grand Rapids, have lost workers to Detroit and other centers of expanding employment. Production quotas and material shortages will cause a considerable amount of unemployment in Michigan in the next several months unless it is possible to accelerate defense production. A 50 percent curtailment would eliminate about 175,000 nondefense jobs in the automobile industry by January 1942-and in spite of off-setting increases in defense work, net unemployment in January will affect at least 54,000 workers in the Detroit area, 17,000 in Flint, and from 4,000 to 6,000 in Pontiac, Lansing, and Saginaw. Adoption of a 32-hour week would reduce but not eliminate this unemployment. A more detailed discussion of the dislocation of labor expected in important cities, and the limitations of the data on which the estimates are based, is presented in section IV of this report. CURTAILMENT IN OTHER INDUSTRIES Outside the automobile centers, considerable unemployment may result from curtailed production (caused by material shortages if not by quotas) in many other industries using materials essential to defense. In Grand Rapids and Muskegon, for example, unemployment from this source may be severe. Since this dislocation of labor, in the absence of counter measures, may stimulate migration away from Michigan's industrial centers, there is a real danger that essential workers will be unavailable when defense production reaches its peak in 1942. In order to meet this problem, it is essential for the State and Federal Governments-in cooperation with industry and labor-to take every possible step to protect the economic security of displaced workers. to speed up the expansion of defense jobs, and at the same time to prevent further migration to Michigan industrial centers, which might only multiply existing problems. Such possibilities as the liberalization of unemployment compensation, the development of training programs which furnish at least a subsistence income, and the assignment of defense contracts to concerns and areas most severely affected by quotas and priorities, must be energetically explored. SECTION I. NORMAL MIGRATION PATTERN OF MICHIGAN INDUSTRIAL Prior to the defense program the migration of workers to industrial centers has played a vital part in the growth of Michigan industry. Since the turn of the century, rapidly growing industries such as automobile manufacturing and the manufacture of refrigerators, heating equipment, and household appliances have required continually more manpower than has been available in the various manufacturing centers cf the State. High wages and high living standards in industrial centers such as Detroit, Flint, Lansing, and Saginaw have attracted workers not only from rural parts of the State but from other States and other lands. Thus, a large part of the population of Michigan industrial centers consists of workers who formerly lived in other areas and their families. The rapid growth of Michigan industry would have been impossible without these shifts in population. The movement into industrial centers which marks periods of rising industrial activity is reversed in periods of depression such as the early 1930's. During such periods unemployed industrial workers who have migrated from communities in rural Michigan and other States tend to return to their home communities and lower living costs. Rising business activity, however, finds many of these workers or their friends and neighbors returning to the industrial centers of the State for employment in mass production industries at high wages. A. THE RISE OF MICHIGAN'S INDUSTRIAL POPULATION In the late 1800's Michigan's working population was predominantly engaged in agriculture, forestry, fishing, and mining, which accounted for 45 percent of all gainful workers in the State in 1880. In 1900 these three basic industries accounted for 37 percent of all Michigan gainful workers but by 1930 they aecounted for less than 15 percent. During this period there was a marked increase not only in the proportion of workers engaged in manufacturing and mechanical industries but also in related pursuits such as transportation, communication, trade, and professional and clerical services. More striking than the change in the distribution of gainful workers was the actual increase in numbers from 569,000 in 1880 to 906,000 in 1900 and to 1,927,000 in 1930. From 1900 to 1930 the number of workers engaged in manufacturing and mechanical industries increased by 161 percent. B. SHIFTS IN POPULATION WITHIN THE STATE In the three decades from 1900 to 1930, the rise of large scale industry and the decline of agriculture, lumbering, and mining brought about rapid and significant changes in the distribution of population within the State. Although the State's population increased by 1,154,000 between 1920 and 1930, nearly all of the increase was concentrated in 26 counties, while 13 counties remained nearly unchanged, and 46 counties experienced population losses. In 4 principal automobile manufacturing counties, population increased from about 455,000 in 1900 to nearly two and a half million in 1930-an increase of more than 400 percent. Ten other important industrial counties also grew rapidly, with an average increase of 73 percent. During the same period, there were only minor increases in the agricultural counties of the southern part of the Lower Peninsula and the Upper Peninsula, and an average decrease of 13 percent in the cut-over area comprising the northern half of the Lower Peninsula. In each decade, an increasing percentage of the State's workers have been massed in the industrial counties. The four major automobile counties contained less than one-fifth of the total population in 1900 but more than half of the total population in 1930. While population in the industrial counties was increasing between 1920 and 1930, the cut-over area and the Upper Peninsula were losing population by migration to other areas. By use of data on births and deaths in each county, it is possible to determine what the population would have been at the end of the decade with no migration to other areas. On the basis of these data all but one of the counties in the cut-over area and all but three in the Upper Peninsula lost population by migration in the decade between 1920 and 1930. While the movement from farm to city was sharply reversed during the depression, the expansion of industrial employment since 1935 has again created movement of workers from rural to urban areas. C. MIGRATION FROM OTHER STATES Migration of workers from rural sections of Michigan has been only one source of the population growth of the large automobile manufacturing centers. According to the 1930 census, only 58 percent of the 4,842,000 persons in Michigan were residents of the State, while 23.5 percent (nearly 1,137,000) were natives of other States, and 17.6 percent (about 853,000) were foreign-born. The principal sources of migration from other States, in order of rank, were Ohio, Illinois, Indiana, Pennsylvania, New York, Wisconsin, Kentucky, and Tennessee. Sixteen percent of the population of Michigan in 1930 consisted of ratives of these eight States. Prior to 1910 most of the migration into Michigan was from eastern States, particularly New York. Since 1910, southern States, particularly Kentucky, Tennessee, and West Virginia have accounted for a large portion of the migration into Michigan industrial centers. Michigan has long been a favorite center of settlement for the foreign-born. Only four States (New York, Pennsylvania, California, and Massachusetts) had more foreign-born residents than Michigan in 1930 and only seven States had a higher ratio of foreign-born. D. THE CHANGING DIRECTION OF MIGRATION IN DEPRESSION With the highest wage rates in the world for unskilled and semiskilled labor, and a relatively high standard of living, Detroit and the other automobile centers have been a magnet for migratory workers during periods of industrial expansion. |