1. Selected employment service activities, U.S. total for fiscal
years 1956-59, by State for fiscal year 1959 .

147

2. Temporary unemployment compensation programs covering
exhaustees under State unemployment insurance programs
and the Federal programs for Federal employees, ex-service-
men, and veterans, June 1958-July 1959

148

3. Significant provisions in State unemployment insurance laws,
August 12, 1959 . .

150

152

4. Claims, beneficiaries, amount and duration of benefits, U.S. total for fiscal years 1953-59, by State for fiscal year 1959. 5. Subject employers, covered employment, and selected unemployment insurance financial data under State programs, U.S. total for fiscal years 1953-59, by State for fiscal year 1959

6. Selected data on unemployment compensation for Federal employees, U.S. totals for January-June 1955, and fiscal years 1956-58, by State for fiscal year 1959

7. Selected data on unemployment compensation for veterans program, U.S. totals for fiscal years 1954-59, by State for fiscal year 1959

8. Disqualifications, by issue, fiscal years 1953-59, by State for

9. Selected data on unemployment compensation for ex-servicemen, by State, October 1958-June 1959. .

154

156

157

158

160

Introduction

One of the most important advantages of the nationwide employment security programs of the Federal-State system of employment security agencies is a unique ability to adjust swiftly and effectively to challenging changes in economic conditions. The operating experience of these programs during the last 2 fiscal years produced fresh evidence of this valuable attribute. Over this 24month span, the Nation experienced a time of high employment, a short but sharp recession, and a period of recovery. In each of these periods, the employment security programs made major contributions to wage earners and the economy.

Promoting economic security for wage earners and the Nation is the prime. business of the employment security system. This responsibility is discharged through two major programs. One is a nationwide employment service which offers job finding and counseling assistance to all workers and help to all employers in finding qualified workers. The other is an income maintenance program, unemployment insurance, which pays benefits to unemployed workers to help them buy necessities when unemployed. The one program promotes economic security by helping workers find permanent jobs and full paychecks. The other provides an income bridge for unemployed workers until they can obtain full-time employment.

During the fiscal year 1959, the employment security programs demonstrated their effectiveness in a period of economic recovery. Through its nationwide employment service it helped millions of workers find jobs and assisted employers in recruiting the manpower required to produce the goods and services demanded by the rising economy.

Statistically in fiscal 1959, the employment service made nearly 6 million nonagricultural job placements and the unemployment insurance program paid out more than $31⁄2 billion in benefits to workers covered by permanent and temporary laws.

But statistics do not tell the whole employment security story. The employment security programs deal with people, and they come to grips with the most real and compelling problems that people face. The real story, then, is what this program does to help individual workers find new employment where they would again have full paychecks, and to pay benefits which help workers to buy necessities and maintain their self-respect and their families together until new jobs can be found. It is a story of young people assisted through job counseling and testing programs into jobs where they can make best use of their talents, and of older workers and handicapped workers assisted to take their proper place in the Nation's work force.

A characteristic of the first stages of an economic recovery is that production normally rises much faster than do job opportunities. This was what happened

during most of the 1959 fiscal year. While production returned rapidly to prosperity levels, employment recovery lagged behind until the closing months of the year. The operations of the unemployment insurance program during the period of lagging employment recovery not only helped millions of individuals but contributed strongly to maintenance of personal income.

A review of employment security operations during 1959 shows that the system made a greater contribution to unemployed workers during the year than in any previous comparable recovery period. This was due to the passage in June 1958 of emergency legislation extending duration of benefits by 50 percent for claimants exhausting benefit rights under regular programs. Thanks to this legislation providing longer duration of benefits, millions of workers who normally would have been cut off from all income when they drew all benefits to which they were entitled under permanent legislation were provided income until they could find jobs. About 22 percent of all benefits paid out during the year were received by claimants who qualified for benefits under temporary legislation. The year's experience was a dramatic demonstration of the value of longer duration, particularly in periods of relatively high unemployment.

The effectiveness of the employment security programs is dependent not only upon good management but alertness on the part of both the Federal and State partners to keep the program modernized and in line with the needs of a growing dynamic society.

Decisive steps were taken during the year to strengthen both the employment service and the unemployment insurance programs. These steps have resulted from full cooperation between the States individually and through the Interstate Conference of Employment Security Agencies with the Bureau. A broad countrywide program was initiated and advanced to improve the placement counseling, employer, and other valuable services provided by the nationwide employment service to workers and employers. Steps were taken to strengthen recruitment facilities both on a local and nationwide basis. Good progress was made in improving services for both nonagricultural and farm workers and all employers.

Almost half of the States acted during the 1959 legislative sessions on the benefit provisions of their State unemployment insurance laws. Considerable progress was registered in raising benefits and increasing duration closer to the goals which have repeatedly been recommended by the President. Much more progress must be made, however, if the great majority of workers are to be eligible to receive weekly benefit payments equal to at least half their regular earnings for at least 26 weeks, as recommended by the President.

A Year of Economic Recovery

Economic Trends

Fiscal year 1959 was a year of rapid recovery from the sharp but short-lived 1957-58 recession, and by the end of the year many sectors of the economy were once more achieving new record levels.

Gross national product-the sum of all the goods and services produced in the Nation-advanced to a record $484.5 billion annual rate, a level $50.0 billion over a year earlier, $53.5 billion above the recession low in the first quarter of 1958, and $36.7 billion above the prerecession high level of the third quarter of 1957

Industrial production advanced throughout the fiscal year, with the seasonally adjusted index rising from 134 (1947-49=100) in July 1958 to 155 in June 1959. Nondurable goods production, which had recovered from its slight recession dip before the year began, continued to establish new records, reaching a level in June 1959 of 145 percent of the 1947-49 average. The largest production increases occurred in chemicals and petroleum products, textiles, apparel, and rubber and leather products. Durable goods production, which fell more precipitously during the recession, advanced dramatically through the year, exceeded its prerecession (December 1956) peak rate of 165, rose to 169 percent in May 1959, and reached 172 percent of the 1947-49 average at the end of the fiscal year.

The upsurge in durable goods production was centered in steelmaking and the assembly of automobiles, but spread into nearly every major industry.

Construction activity, despite a slowness in industrial construction throughout the year, was a strong economic growth element. Total expenditures for new construction were at record levels, rising from an annual rate of $48.4 billion at the start of the year to $55.0 billion at the year's end.

Increase in Employment and Decrease in Unemployment

The civilian labor force at the close of fiscal year 1959 was at a record level of 71.3 million workers, and civilian employment at a record level of 67.3 miliion workers. Nonagricultural employment, at 60.1 million, was above the 60-million mark for the first time, and agricultural job holding, at 7.2 million, was 300,000 above a year earlier.

Employment increases during most of the year, however, lagged behind the rapid recovery in industrial production as the average hourly workweek increased before staff was added, and because of productivity increases.

It was in the closing months of fiscal year 1959 that nonfarm employment began to rise significantly. For the year as a whole, total employment in nonagricultural establishments increased by 2.1 million workers to a seasonally adjusted level of 52.4 million in June 1959. Most of this rise occurred in manufacturing, where the seasonally adjusted level in June was 16.5 million workers, nearly 1.2 million above the level at the beginning of the fiscal year.

Employment in durable goods manufacturing industries increased by 990,000 persons, with 5 major industries-primary metals, nonelectrical machinery, electrical machinery, motor vehicles, and fabricated metals-accounting for more than three-fourths of the gain. Largest over-the-year employment increase in manufacturing was in the basic primary metals industry. Employment in nondurable goods industries increased by nearly 220,000. Nonfactory employment

also registered significant gains, particularly in trade, State and local government, construction, and service.

Unemployment in July 1958 totaled 5.3 million. Although unemployment dropped below the 5-million level in August 1958, and below the 4-million level in October and November, most of the changes through February 1959 were seasonal in nature. Beginning in March, total unemployment began to show substantially greater than seasonal declines, with the May and June rate down to a seasonally adjusted level of 4.9. The June volume, because of the increase in school youth in the labor force, was 4.0 million.

State-insured unemployment, which averaged 2.5 million per week at the beginning of July 1958, declined rapidly, on a seasonally adjusted basis, as the year progressed to an average weekly volume of 1,298,000 in June 1959. Proportionately the decline in insured unemployment was greater than that in total unemployment, largely because the greatest employment increases were occurring in covered industry, and also because a substantial number of claimants exhausted their benefit rights.

Unemployment, at 4.0 million in June 1959, was 1.4 million under June 1958. The 4.9-percent seasonally adjusted unemployment rate of June 1959 contrasted favorably with the 6.8-percent rate of June 1958 and the 7.3-percent rate of July 1958.

Changed Characteristics of the Unemployed

A notable accompaniment of the greatly improved employment situation at the close of the year was the markedly smaller proportion of men among the unemployed than a year earlier. In June 1958, when unemployment was high among workers in durable goods manufacturing and allied industries, men 25 years old and over comprised 40 percent of all the unemployed. In June 1959, the proportion was down to 33 percent. Noteworthy, too, was a sharp decline— by 700,000 to a volume of 927,000-in the number of persons unemployed 15 weeks or longer, and here, too, the decline was mostly among adult males.

Unemployment among workers in all major industrial groups had declined substantially by the end of fiscal year 1959. The sharpest unemployment drop from a year earlier (by nearly two-thirds) was among factory workers in the durable goods industries, which had been hardest hit by the economic downturn. Unemployment among workers in the mining industry decreased by nearly one-half. The unemployment rate of workers in construction, 8.3 percent in June 1959, remained the highest among all industries, despite an overthe-year drop of one-third in unemployment. The smallest relative decrease in unemployment was among workers in the service industries, who, however, had been least affected by the recession.

By occupation, unemployment also declined in all major groups with the sharpest drops among operatives and craftsmen-both down by nearly one-half over the year. At the end of the fiscal year, the rates of unemployment were highest, as usual, for nonfarm laborers (9.0 percent), operatives (6.6 percent), and service workers other than household (6.5 percent).