The trend was to some extent reversed during the depression years of 1930 to 1935, with thousands of workers and their families moving back to other parts of Michigan or their former homes in other States as unemployment became widespread in the manufacturing cities. The shift from the cities to rural areas and to other States was reflected in school census figures and in the special Michigan Census of Population and Unemployment taken in 1935. The population of most industrial centers showed a decline during this period while rural agricultural areas and cut-over areas of the State showed marked increases.

With the growth of rational recovery, from 1935 to 1937, the tide of movement again turned toward the cities and former automobile workers (or their relatives and friends) again moved into such cities as Detroit and Flint in the search for jobs and high wages. While the volume of migration to Detroit in recent years bas probably been less than it was in the 1930's, it was substantial even before the defense program created a new stimulus.

E. OUT-MIGRATION OF THE UNEMPLOYED

Two groups of migrants should probably be distinguished. Some of themprobably the majority-found permanent jobs in the industrial centers, made their homes there, and became part of the community. Others-especially those who were unmarried, or who did not bring their families with them-worked in the manufacturing centers only when jobs were available, and then returned to their former homes in rural Michigan or in other States during the off season.

This latter type of movement is reflected to some extent in unemployment compensation claims filed against the Michigan fund, in other States, by workers who formerly worked in Michigan. In 1939, about 20,000 individuals filed such claims-and in the 2 years ending June 1940, it is estimated that at least 30,000 different workers filed claims in other States against the Michigan Unemployment Compensation Fund.

Less than 20 percent of these interstate claims came from States adjacent to Michigan, while 80 percent were from nonadjacent States-with a relatively large part of the total from Kentucky, Tennessee, Pennsylvania, and West Virginia. Other important States to which migration occurred were New York, California, and Missouri.

Many of the interstate claimants had insufficient earnings in Michigan to qualify for benefits, but those who did qualify were primarily manufacturing workers (70 percent) and about 43 percent came from the automobile industry. The percentage of women among interstate claimants was considerably lower than among claimants who filed their claims within the State.

Since 1939, as employment has expanded in the automobile centers, there has been less migration away from Michigan and more migration into the State. The out-movement which occurred during the 1938 depression, however, can be expected to recur in rather similar form if production quotas and priorities create a mass unemployment problem in Michigan.

A supplementary statement on the extent and character of outward migration, as indicated by unemployment compensation records, will be submitted separately.

F. MIGRATION OF NONMANUFACTURING WORKERS

The number of nonmanufacturing workers cannot be ignored in the review of Michigan migration. The fruit and vegetable industry, the beet-sugar industry, the resort industry, and the logging industry depend to a considerable extent upon migratory seasonal workers who return to their home communities in the off

seasons.

The fruit and vegetable industry has been dependent to a large extent upon city families with children who move from locality to locality with the crops. During the past decade the beet-sugar industry has been largely dependent upon Mexican labor from the Southwest for its field work. The resort industry is staffed largely by residents of resort communities, but is also dependent upon students who turn to the resort industry for summer employment and upon migratory resort workers who systematically work in northern resorts during the summer and southern resorts during the winter months. The logging industry is manned to a considerable extent by single unattached men who are not permanent residents of the communities in which they work.

SECTION II. CHARACTER AND LOCATION OF MICHIGAN'S INDUSTRIES

The curtailment of passenger-car production will be felt more severely in Michigan than in any other State, because of the predominance of this single

industry in Michigan's economic structure. The development of mass production has brought with it a rapid expansion of factory employment in this State. Some indication of the importance of manufacturing is furnished by the fact that more than 810,000 of the 1,250,000 workers covered by the Michigan Unemploy ment Compensation Act in December 1940 were employed in manufacturingapproximately two-thirds of the total.

Employment in the manufacture of automobiles, bodies, and parts accounts for nearly half of all factory employment-with a total of 394,000 covered workers in December. The steel industry, which in Michigan is largely dependent on automobile production, employed 95,000 workers at the end of 1940. Other important manufacturing industries, which to a greater or less extent are affiliated with the automobile industry, include nonelectrical machinery manufacturing (73,000 employees), rubber products (11,000), nonferrous metals (22,000), electrical machinery (9,000), and other transportation equipment (5,000). Altogether these selected manufacturing groups employed almost 620,000 covered workers in December-almost half of the total number covered by the Unemployment Compensation Act, and well over three-fourths of the total for all manufacturing industries.

Measured in terms of pay rolls, the predominance of the automobile industry is even greater than it is in terms of employment. In 1940, the wages and salaries of workers employed in the manufacture of automobiles, bodies, and parts (31 percent of covered workers) amounted to $688,000,000 in Michigan-more than 36 percent of the State's total covered pay rolls of $1,908,000,000. Iron and steel, with aggregate pay rolls of $142,000,000, and nonelectrical machinery manufacturing, with $136,000,000, bring the total wages and salaries of workers in the automobile industry and the two most closely allied groups to almost $1,000,000,000 in 1940 and at the end of 1940, when employment on 1941 models was at a peak, wage and salary payments for these industries were proceeding at a rate equal to close to $1,200,000,000 per year. In this quarter, these industries accounted for 45 percent of the State's covered employment, and 51 percent of all covered pay rolls.

The manufacture of durable consumers' goods other than automobiles accounts for a large part of the State's industrial activity. Although these industries have not been affected so far by production quotas, they will be affected in many instances by material shortages under the priorities system. This is particularly true of manufacturers of refrigerators; washing machines and household appliances; furnaces, stoves, and heating equipment; hardware; and metal furniture and utensils.

Any decline in factory employment, resulting from production quotas and material shortages, is certain to have repercussions on other industries, such as trade and service, which exist primarily to serve the wage earners employed in industry. Obviously, a curtailment in automobile production will restrict the employment opportunities of the 38,000 wage earners employed in retail automotive establishments, automobile service stations, garages, automotive finance companies, and other businesses dependent on sales of automobiles. In addition, some 16,000 proprietors are dependent on businesses in this field. Even if the loss of employment in this "satellite industry" is not in full proportion to the curtailment of production, substantial unemployment or reduction of income is bound to occur. Workers in durable consumer goods outlets will be affected in

the same way. The impact of declining factory employment on retail and wholesale trade, service industries, and transportation presents an even greater problem. In Detroit, for example, there are 70 workers engaged in service and trade for every hundred engaged in primary production. Unless the unemployment of automobile workers is minimized or kept to a short duration, it is conservative to estimate that at least 30 or 40 nonmanufacturing jobs will be eliminated for every hundred factory jobs which cease to exist.

A. INDIVIDUAL AUTOMOTIVE CENTERS

In Detroit and other important Michigan cities, the predominance of the automobile industry as a source of manufacturing employment is even greater than would be suggested by the State-wide figures already presented. Wayne County, the automobile manufacturing center of the world, ranks second only to Cook County (Chicago) in the number of manufacturing wage earners employed in 1937. In March of this year, about 499,000 of the 725,000 Wayne County workers covered by the Michigan Unemployment Compensation Act were employed in manufacturing -and nearly 60 percent of Wayne County's factory

workers (292,000) were engaged in production of automobiles, bodies, and parts. Other closely related manufacturing industries, likely to be affected indirectly by automobile curtailment are iron and steel manufacturing (with 51,000 covered employees in March), nonelectrical machinery (46,000) and nonferrous metal manufacturing (21,000).

Manufacturing employment in Flint, Michigan's third city, is dominated overwhelmingly by the motor industry --perhaps to a greater extent that in any other city in the United States. Of the 64,000 workers covered by unemployment compensation in March, nearly 50,000 were engaged in manufacturing and about 47,000 of these were in the automobile industry, nearly all of them in General Motors plants.

Pontiac, like Flint, is practically a one-industry city. Of the 45,000 Pontiac workers covered by unemployment compensation in March, 33,000 were engaged in manufacturing activities, and more than 85 percent of these (27,000) were employed by automobile companies.

In Lansing, despite a somewhat larger proportion of employment in trade, service, and Government work, manufacturing is the predominant industry-and nearly 17,000 of the 23,000 manufacturing workers covered by unemployment compensation in March were in the automobile industry.

Saginaw County, with 20,000 manufacturing employees in March, had about 12,000 in automobile parts factories, and more than 5,000 engaged in producing nonelectrical machinery, much of which is used by the motor industry.

B. AREAS DOMINATED BY NONAUTOMOTIVE MANUFACTURING

Automobile factory employment is concentrated primarily in five cities of the southeastern section of the State-and in these cities any reduction of automobile production will have an immediate impact not only on the jobs of factory workers but also of men and women engaged in wholesale and retail trade and the various service industries which exist primarily to serve the factory population. In other sections of the State, production quotas will have a less direct effect, although there are significant numbers of automobile workers in such cities as Bay City and Grand Rapids. However, the principal unemployment problem which exists in such cities as Grand Rapids, Muskegon, and Kalamazoo will result from possible interruptions of civilian production which are caused by material and equipment shortages rather than by the automobile quotas themselves.

Although Battle Creek is predominated by the processed cereal industry, it also has a number of durable goods manufacturing industries, such as printing presses, auto parts, stoves, steel and wire, and cooking utensils, which may be affected by materials shortages. Its most important national-defense industry is Fort Custer, which initiated a huge expansion program at the beginning of the defense emergency. This building program drew thousands of workers into the Battle Creek area.

The Grand Rapids and Holland area has been engaged to some extent in the manufacture of automobile parts and equipment. The manufacture of furniture, electrical household equipment, stoves, and furnaces accounts for by far the greatest proportion of its manufacturing. Industry is much more diversified in this area than in the automobile centers. It has a large proportion of small establishments, many of which are in various types of metal processing which may be affected by material priorities. So far, this area has received a very small number of national-defense contracts.

Jackson manufacturing has been devoted to automobile parts and equipment, to electrical automotive parts and household appliances, and radios, and the production of industrial grinding wheels, drills, and tools. Since the beginning of the national-defense program, new firms have established plants in Jackson for defense production which may offset unemployment resulting from materials shortages and automobile quotas.

Although Kalamazoo is noted as a paper manufacturing center, it is also an important stove and furnace manufacturing center, and produces considerable industrial machinery, tools, dies, and machine-shop products.

Large national-defense contracts have resulted in considerable industrial expansion in Muskegon, since the beginning of the national-defense program, making this city an important center for the migration of industrial workers. Since it is a large producer of refrigerators, metal furniture, and various metal products, it may be affected greatly by material shortages under the priorities

program.

C. NONINDUSTRIAL AREAS AND ONE-INDUSTRY TOWNS

The Upper Peninsula of the State, which has been noted for its mining and Jumbering industries, will probably experience increased activity under the national-defense program. Some mines, which were inoperative for years, are now being worked to provide defense materials, while the demand for domestic wood pulp for the paper industry has been rising due to the fact that the European pulp supply has been cut off by the war. The northern part of the Lower Peninsula, which is predominantly cut-over and reforested land, has been little affected by the national-defense program.

Many of the small cities of the State which have single industries may be seriously affected by material shortages and production quotas. While manufacturing in such cities accounts for only a small portion of the industrial production of the State, the closing of a single plant may create serious crises in individual communities concerned. Lack of materials for stove production, as an example, would deprive Dowagiac of its most important source of employment.

Industries such as the beet-sugar industry in the Saginaw Valley and Thumb area, and the fruit industry of the Lake Michigan area have been little affected by production quotas and priorities, but may be sorely affected by tightening labor-market conditions which are diverting migratory part-time workers who have been traditionally employed by these industries into defense employment and into the military forces. While agriculture and industries dependent on agriculture have not been seriously affected during the 1941 season, more serious labor shortages may be expected in 1942 or after.

D. DEFENSE POTENTIALITIES OF MICHIGAN INDUSTRY

As the traditional centers of mass production industry in the United States, Detroit and the other automobile cities will play a major role in defense production. Primary defense contracts for more than one and a half billion dollars have been awarded to Michigan industry to date, and additional subcontracts and indirect defense work amount to over $2,000,000,000. Eventually, when the transition from civilian to defense work has been completed, Michigan's factories will have need for all their present workers, and perhaps for even more. Much of the unemployment which may occur in the next few months represents only a temporary problem, and a period during which we must make efforts to keep our working force intact in preparation for the time when planes and other armaments are rolling out of Michigan factories in overwhelming amounts. Some automobile workers, however, may not be able to find employment in defense industries because of the special skills required. In addition, there is likely to be continuing dislocation in nondefense employment throughout the defense period due to changing and increasing demands for materials for defense.

By their very nature, Michigan's industries are potentially convertible to defense production. In July a survey by the State employment service showed that the automobile industry and other metal fabricating industries which might be adapted for defense production employed more than 682,000 workers. Of this total, more than 196,000, or 29 percent, were already engaged on defense work. About two-thirds of these (123,000) were in the Detroit area, while there were already about 9,000 defense jobs in Muskegon, 9,000 in Pontiac, 7,300 in Bay City, 6,400 in Saginaw, 5,600 in Jackson, and 5,200 in Battle Creek. To date, the conversion to defense production has proceeded more rapidly in nonautomotive industries than in the automobile plants. The next phase of the defense expansion involves accelerated conversion of the automobile plants, with some temporary dislocation of labor, and the prospect of an eventual peak of employment as high as or higher than anything in the past.

SECTION III. PATTERN OF MICRATION DURING THE PAST YEAR

The rapid expansion of both defense and nondefense employment in Michigan's industrial centers during the past year has brought with it a considerable migration of workers. In general, this has been a movement toward the principal industrial centers especially those in which there were important defense contracts, or in which there was a boom in production of civilian commodities.

Because increasing employment during the past year has been due partly to rises in automotive production and partly to defense expansion concentrated in automotive, centers, the general pattern of in-migration has been quite similar to the movement which has previously occurred when automobile production has reached high levels. Many of the in-migrants are undoubtedly workers who have previously been employed in Michigan's industrial centers, especially in 1929 and 1937. The prospect of thousands of new factory jobs has encouraged workers to move to such cities as Detroit, Flint, Pontiac, and Muskegon, both from rural Michigan and from other States.

The Federal and State Governments, through the public employment service system and the Office of Production Management, have attempted to prevent unnecessary migration. The clearance system of the public employment offices is designed specifically to encourage migration only when a shortage of workers actually exists in a community. Local labor market information is used in an effort to keep workers from leaving areas in which job opportunities will soon be available. Because of the Nation-wide coverage of the clearance system, the Office of Production Management has urged employers to use the employment service whenever it appears necessary to recruit nonlocal workers.

In spite of efforts to restrict migration, however, there is a good deal of evidence that many thousand workers have come to Michigan from other areas without any definite jobs offered to them in advance.

Although a large proportion of the migrants have nevertheless found jobs, much of the movement has been undesirable and unjustified, since local workers have been available and have been given preference for most of the new jobs which have developed. As a general rule, Michigan employers have preferred to hire local residents, and have discouraged applications from the migrant group. Also, many of the migrants have lacked the occupational qualifications which are needed in defense jobs or in other expanding types of work. As a consequence, there is some evidence that many of the nigrants have not stayed in Michigan, but have continued to travel in search of work. In this section of the report, the following types of data on recent migration will be considered:

(a) Analysis of "new applications for work" filed in Detroit offices of the employment service during the past year by workers who had never previously registered in that area.

(b) Claims for unemployment compensation benefits filed in Michigan by workers previously employed in some other State.

(c) Studies of the wage records of the Michigan Unemployment Compensation Commission to determine how many workers with Social Security numbers originally assigned in some other State were working in Michigan in 1941, although they had not been employed in this State at the beginning of 1940.

(d) Comments on migration into or out of the labor market areas served by individual offices of the Michigan State Employment Service, based on narrative labor market reports submitted monthly by the local offices.

Later sections of the report will deal with future migration which may result from curtailment of nondefense automobile production or from unemployment caused be material and equipment shortages resulting from the defense program.

A. NEW APPLICATIONS FILED BY MIGRANT WORKERS IN DETROIT EMPLOYMENT OFFICES, AUGUST 1940 TO AUGUST 1941

Because of the concentration of heavy industry in the Detroit area, a considerable part of the defense migration during the past year has involved a movement from other areas to Detroit or its satellite communities. Since August 1940, a sample of new applications filed in offices served by the Detroit Central Placement Office has been analyzed to determine how many registrants were last employed in some other area.

Figures based on this analysis are summarized in tables 1 and 2. The first of these tables presents figures for each month in the period, surveyed while the second analyzes the data in terms of occupation. (In the tables, the data from the sample are expanded to estimated totals based on the total number of new applications in each month. A new application is an application for work received from an individual for whom the local office has no record of a previous registration.)