shift, department, occupation, or length-of-service group in which the various volumes of turnover are found. The great difference in the volume of turnover in different occupations is shown clearly in Table I presented above. Some occupations in the cloak, suit, and skirt industry of Cleveland, such as female cleaners and label sewers, and male trimmers, assorters, and assemblers, show turnover extents more than three times as large as the average for the industry, and more than four times as large as that found in some of the other occupations. The variations in the extent of labor turnover in different departments of the same organization is illustrated in Table II. Some departments, such as "Big Four: common labor," day shift, and "Garage: maintenance work," night shift, show turnover extents about four times as large as the average for the establishment. Again, another department, namely "Screw, hand, and automatic screw machines, heading and slotting," day shift, shows a turnover extent smaller than the average for the organization.

It is obvious that groups with short records of service must necessarily show relatively higher extents of turnover. Table III, which was taken from one of the recent studies of the Federal Bureau of Labor Statistics,' shows the relative extent to which various length-of-service groups of employees are responsible for turnover.

This table shows that the groups with records of continuous service of less than one month, while constituting only about II per cent of the force, were responsible for more than 40 per cent of the separations. The chances for separation appear to decrease greatly with increased service. The service group of five years and over-17.5 per cent of the organization-was responsible for only 1.9 of the total number of separations.

In this connection it might be of interest to illustrate the bearing of the existence of specific separation groups upon the instability of the working force. In the following illustrative calculations the size of each service group is indicated by the mean of its lower and upper limits.

The existence of a "one week or less" separation service group, with a mean length of employment of 3.5 days, would necessitate Monthly Labor Review (January, 1919), pp. 11-29.

the hiring of 103 persons per position per year, over and above the worker originally hired to fill the job. Such a replacement extent would be equivalent to an annual labor turnover of 10,284 per cent. A separation service group of "over one week to two weeks," with a mean service duration of 10.5 days, would compel the hiring of 34 extra persons per position per year, or a labor turnover of 3,396

TABLE III1

PROPORTION IN EMPLOY AND AMONG THE SEPARATIONS OF CERTAIN

IDENTICAL LENGTH-OF-SERVICE GROUPS OF EMPLOYEES

IN 18 ESTABLISHMENTS IN CLEVELAND

per cent per annum. The presence of an "over two weeks to one month" separation class, with a mean duration of service of 22 days, would cause 16 extra replacements per job per year, or a turnover of 1,563 per cent. Similarly the existence of "over one month to three months" group causes the hiring of 5 extra persons per position per year. The latter volume of replacement is equivalent to an annual labor turnover of 508 per cent.

WASHINGTON, D.C.

BORIS EMMET

1 Taken from the Monthly Labor Review, U.S. Bureau of Labor Statistics (January 1919), pp. 11-29.

MAINTAINING PRODUCTIVE OUTPUT—A PROBLEM IN

RECONSTRUCTION

The problem of industrial reconstruction is primarily the problem of turning our resources from the channels of war-time production into those of peace-time production. Secondarily it is the problem of utilizing this period of change to bring industrial process into closer conformity with our ideal industrial program by conserving what we have learned through our war experience.

The most important and difficult task of reconstruction is to make this readjustment and still maintain the productive level of which we have found ourselves capable during the war. There is evidence that we have increased our output of products from 25 to 30 per cent over the pre-war period through the complete utilization of our natural resources, our plant and machinery, and our labor. If production is allowed to return to the pre-war level output will slump off by 20 per cent. This would mean a corresponding waste of productive resources and a decrease of $14,000,000,000 per annum in our national income as measured by the present price level; even if prices should fall 30 per cent the decrease would still be approximately $10,000,000,000. In view of the magnitude of this waste the government can well afford to spend several billion dollars per annum if necessary to maintain the level of productive output. The essence of the process would be that we would waste two billion dollars of our productive capacity in order to keep ten to fourteen billion dollars' worth of resources from running to waste because of unemployment. The result is a net addition of twelve billion dollars to our national income. The alternatives presented by this situation are not government expenditure of this amount as against private expenditure; they are government expenditure of several billions as against a waste of productive resources many times as large.

A decline of the high level that we have reached during the last two years will bring about a lowering of the standard of living which

our laboring classes have attained during the war. Further, it will prevent the possibility of that improvement in the standard which we should realize now that we have ceased wasting a large part of our output on war. One-half of the amount annually spent on the war by the United States would add two hundred dollars on the average to each of the twenty-five million laboring families of the United States.

Such a fall of output will mean a decline by half in the volume of annual savings which we have made during 1916, 1917, and 1918. Savings, as the term is here used, consist of the excess of the nation's production over its consumption and determine the annual net addition to our national wealth. During the war this excess has grown from six and a half billions in 1913 to over twenty billions in 1918; it has made possible the furnishing of thirteen billion dollars of capital to foreign nations, the addition of over one billion dollars to our stock of gold, an enormous extension of our plant equipment, and the prosecution of eighteen months of war without any appreciable diminution of the standard of living of our people. These additional savings have come, practically in their entirety, from the added production of the nation. If the additional product disappears, savings will decrease by almost a corresponding amount. The result will be a decline in the rate of growth of our national wealth and in the volume of funds for loans abroad, and a rise in the rate of interest.

Such a decline in production will further have as its concomitant a period of widespread unemployment.. This is especially true because of our returning soldiers, whose numbers are more than adequate to replace those who would naturally leave the ranks of labor now that the war is over. A period of widespread unemployment can hardly fail to bring about political agitation for a radical change of the present industrial order. Even to the thoughtful laborer, to say nothing of the demagogue who attains to leadership, it will seem that those socialists are right who insist that the capitalists, meaning thereby the entrepreneurs, are interested, not in the utilization of our resources to satisfy the wants of our people, but only in profit; that in order to make profits it is necessary, in normal times, to restrain the supply of products and thus decrease

the demand for labor to the point where the price of the former shall rise high enough above the price of the latter to leave the capitalist class a handsome margin of profit. It really does appeal to one's common sense as being preposterous that the laborer should be thoroughly employed at good wages and should therefore enjoy a high standard of living when the nation is wasting billions upon war, and should find it impossible to secure employment and maintain that standard when the waste of products has ceased. The present industrial order depends for the direction of productive activity upon individual initiative motivated by profit. If it is to endure, it must demonstrate its ability to prevent the consequences now threatening American industry. If it fails in this, then it seems reasonable that the great mass of laborers will demand a trial for a régime in which government shall again control and direct production as it did during the war to bring to its fullest realization our capacity for productive output. If our production does fall off by fourteen billion dollars and the laborer does make this demand, who shall say him nay?

It behooves those of us who believe that an order of private property and individual initiative in industry is desirable to ask ourselves what can be done to conserve the lesson which the war has taught us concerning our productive ability.*

The point of view most relevant and valuable in attacking this phase of industrial reconstruction is that which recognizes the dependence of employment and productive output upon the state of business enterprise which exists among the entrepreneurs of the nation. It has become trite to say that many things will be different after the war, but it is certain that the industrial situation will still remain such that men who have jobs will have them because they are employed on the initiative of some entrepreneur, and plant and machinery that is kept running will be running because some entrepreneur so decides.

Considered as a problem in business psychology the task is that of maintaining the exuberant spirit of business enterprise which has characterized the American entrepreneurs during the last three years, for while this spirit can be maintained it is safe to presume that our labor, our natural resources, and our plant and machinery