Social Security Bulletin

Volume 3


Number 10


SIGNIFICANT improvement in employment oppor- tunities in many parts of the country, which may be attributed in large part to activities connected with national defense, was reflected in operations under the employment security program during August. Unemployment benefits for the month amounted to $51.7 million, a decrease of 7.2 per- cent from the amount for July. Administrative factors involving statutory limitations on the duration of benefit payments within specified benefit years also contributed to the decrease. August payments represented compensation to a weekly average of 1.1 million claimants for slightly more than 5 million weeks of total and partial unemployment. Substantial decreases also were reported by most States in the volume of continued claims received. Reductions were re- ported for all but 10 jurisdictions and amounted to 19 percent for the country as a whole.

More than 280,000 private placements were made during August, an increase of 8 percent from the number for July. The total was 10 percent above that for August 1939, which had been the highest for that month in the history of the United States Employment Service. In addition to pri- vate placements, 50,000 public placements and 167,000 supplemental placements were made dur- ing August. Applications for employment re- ceived during the month decreased by 9.1 percent from the total for July; the active file of persons registered for work declined by 6.3 percent to a total of 5.2 million as of August 31.

PayMENTs to recipients of public assistance and earnings of persons employed under Federal work programs in the continental United States in- creased 2 percent in August, to a total of about $258.4 million. Increases were reported for all types of work-program earnings and assistance payments with the exception of general relief extended to cases from State and local funds, which declined by 1.6 percent. General relief

payments amounted to $32.6 million for August and accounted for only 13 percent of the combined total of public assistance payments and work- program earnings. for the month.

Total obligations for assistance and earnings in August of this year declined almost 7 percent from the total for August 1939. The reductions exerting the greatest influence on the total occurred in general relief, with a decline of almost 15 percent; in the amount earned on projects of the Work Projects Administration, which moved downward 13 percent; and in total earn- ings on other Federal work and construction projects, which declined 7 percent.

LEGISLATION designed to protect the social insur- ance benefit rights of workers during periods of military serviee or training was recommended by President Roosevelt in a message to the Congress on September 14. The text of the President’s message follows:

“The social gains of recent years, including in- surance and other benefit rights, must be preserved unimpaired. The National Guard legislation, which I recently approved, contained provisions evidencing this policy in connection with benefit rights of workers who are called into active service, and a similar provision is contained in pending selective-service legislation.

“T recommend to the Congress early considera- tion of the problems thus recognized and enact- ment of the necessary legislation incident to pre- serving insurance protection under the Social Security Act, the Railroad Retirement Act, and the Railroad Unemployment Insurance Act, and to facilitate State action under the Federal-State unemployment insurance program.

“The agencies administering the Federal acts have been considering the needed technical changes to meet these problems and are now ready to fur- nish recommendations to the Congress in this connection.”

AN AMENDMENT to the Federal Unemployment Tax Act was effected by a provision of the Second Revenue Act of 1940, approved October 8, 1940. Under the amendment employers are permitted credit against the Federal unemployment tax for the calendar years 1936, 1937, or 1938 for con- tributions paid by them under State unemploy- ment compensation laws at any time before the sixtieth day after the date of enactment of the act. If an employer has paid the Federal tax without the benefit of the credit, a refund based on the credit is permitted. A similar provision is made for credit against the Federal unemploy- ment tax for the calendar year 1939, except that the credit allowable is limited to 90 percent of the amount which would have been permitted under existing law if the tax had been paid on or before July 1, 1940. The amendment also provides for allowance of credit for taxes paid, without regard to the date of payment, if the assets of the tax- payer are, at any time within the 59-day period following the date of enactment of the act, in the custody or control of a receiver, trustee, or other fiduciary appointed by, or under the control of, a court of competent jurisdiction.

AMENDMENTS TO THE Railroad Unemployment Insurance Act providing for increases in benefit rates, reduction of waiting periods, and an increase in the maximum duration of benefits were adopted in a law approved by President Roosevelt on October 10, 1940. The changes made in the act will be described in some detail in a later issue of the Bulletin.

Joun G. Winant, Director of the International Labor Office and former Chairman of the Social Security Board, was one of the speakers at the fourth annual meeting of the Interstate Con- ference of Employment Security Agencies, held in Washington October 1-4. “Social Security in a World at War’ was the subject of Mr. Winant’s address. At the concluding session of the Con- ference, Clifford A. Somerville, Chairman, Maine Unemployment Compensation Commission, was elected to succeed John S. Stump, Jr., of West Virginia, as President of the Conference.

Three reports on experience rating were pre- sented to the Conference by its Committee on Employer Experience Rating. In a factual re-

port, adopted unanimously by the Committee, the status of experience rating under Federal and State legislation was reviewed, methods of meas- uring employer experience, of assessing liability against employers, and of computing adjusted rates were described, and technical operating problems were considered. A majority of the Committee presented a report evaluating experi- ence rating in relation to Federal standards and the broad social and economic effects of variable unemployment tax rates, and recommending (1) appointment of a committee by the Conference “to give immediate consideration to the drafting of Federal legislation which will establish stand- ards . . . as a prerequisite to the granting of addi- tional credit to employers whose contribution rates are reduced; and (2)... the establishment— preferably by congressional action—of a na- tional advisory committee, representing labor and employer groups, the Federal Security Agency, and the State employment security agencies, to examine the basic question of whether experience rating should be retained as a part of the system of unemployment insurance in the United States.” Two members of the Committee submitted a mi- nority report expressing disagreement with the views of the 3-member majority and recommend- ing that the Conference take no action favoring increased Federal control over State unemploy- ment compensation systems or condemning em- ployer experience rating. The three reports were received by the Conference and may be acted upon by the membership at a later time.

The Conference adopted several resolutions re- lating to administrative problems and arrange- ments. The Executive Committee of the Con- ference was instructed to “study, and recommend, in collaboration with the Social Security Board, the preservation of wage credits to all workers who enter the military establishment.” It was further resolved that the Conference “inform the Social Security Board, the Federal Security Agency, and the National Defense Commission that the several States are able and ready to undertake new administrative responsibilities which may arise from the extension and develop- ment of the employment security program in the respective States whether for national defense or otherwise.”

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Current interest in training programs in connection with defense activities in the United States makes timely a review of Austrian experience with retraining. Although the industrial situation confronting Austria at the close of the last war was entirely different from that in this country at the present time, the experience outlined should be of value to persons interested in, or engaged in determining policies concerning, training programs in the United States.

THE RECONSTRUCTION ERA following the last World War led to substantial changes in the distribution of industry in Austria. The significant factors bringing about this shift were the disruption of economic relations with parts of the former Austro- Hungarian empire which were separated from the new Austria, and the prohibition, provided in the treaty of St. Germain, of the manufacture in Austria of certain products, such as airplanes, arms, and munitions. Many factories were closed because of these interdictions. The nationalistic drive for isolation and self-sufficiency led to the re- moval of other factories to one or the other of the successor states and to the erection of tariff bar- riers. For similar reasons, new factories were es- tablished in Austria, particularly in the sugar, glass, and porcelain industries.

Moreover, political and economic changes in Europe caused large-scale migrations of workers into and out of post-war Austria. Many clerical workers and government employees returned to Vienna, already overcrowded with clerical per- sonnel who had been dismissed when many in- dustrial concerns transferred their managerial offices to the capitals of the successor states in which their plants were situated. On the other hand, a number of indispensable skilled workers migrated to the new states in which their mother tongue was predominant.

There was thus an unsatisfied demand for skilled labor in certain occupations and a large army of unemployed persons who could not be placed. The generation of workers whose ap- prenticeship extended into the war period and

*Bureau of Employment Security, Research and Statistics Division. This study is based on the experience of the Vienna district employment security agency, of which the author was formerly director. Some of the material has been obtained from Forchheimer, Karl, “‘Die Vorschriften iiber Arbeitslosen- versicherung,”’ Die sozialpolitische Gesetzgebung in Oesterreich, Vol. 6, 1932, and

from the Mitteilungen der Industriellen Bezirkskommission Wien, a weekly bulletin published by the Vienna district agency.

Bulletin, October 1940

immediately thereafter lacked sufficient training for skilled occupations. Since basic raw mate- rials were not available during the war, substi- tutes had to be used in the production of various articles, and there was little variety in production for private purposes. Furthermore, the concen- tration of industry in preparation of materials related to the war prevented training of appren- tices in diversified lines of production. Their training was further hampered by the fact that most of the qualified teachers in the vocational schools as well as the workers who usually super- vised the apprentices were drafted for military service.

Many of the demobilized soldiers had served in the Army for 5 or more years or even, in some instances, for a continuous period of more than 8 years.' Not only their skill but also their inter- est in their previous occupations was almost en- tirely lost because of their long absence from their regular jobs.

Death and disablement of the young skilled workers during the war forced industry to rely mostly on aged labor. The number of these ex- perienced older workers, however, was diminished each year by natural causes, and the younger gen- eration did not furnish proportionate replacements. The chief danger in this situation was the fact that the gradual loss of qualified labor might cause a shrinkage of production.

Austria had, over the period 1919-28, a popula- tion of about 6.5 million, of which roughly one- third was concentrated in Vienna and its environs. About 1 million workers were covered by the unemployment insurance system. During 1919 the number of beneficiaries reached 186,000.

1 Three years of military service before the beginning of the war, 4 years of war service, and 1 year or more with the People’s Army, which had been set up after the creation of post-war Austria.

This figure fell to 8,000 in 1921 as a result of the boom accompanying inflation. After this period of artificial prosperity, Austria entered a period of long-continued unemployment. The number of beneficiaries—the most reliable indicator of the relative volume of unemployment over the years following 1921—reached a peak in 1931, when _ 334,000 persons were in receipt of benefits at one time. While in the years immediately after 1918, two-thirds of all Austrian unemployed workers were centered in the district of Vienna, this propor- tion was reversed by 1928.

The Need for a Retraining Program

Vocational training for young people by means of apprenticesbip and correlated school courses was a recognized part of the educational system of pre-war Austria. The Austrian Trade Regula- tions (Oesterreichische Gewerbe-Ordnung) provided for compulsory apprenticeship in all skilled trades for periods varying from 2 to 4 years. Employers were required to send their apprentices for a few hours each week to certain theoretical courses related to their trades. These courses were organ- ized by the school authorities.

When the apprentice successfully passed his examination at the end of the apprenticeship period, he became a journeyman. Additional opportunities for training were afforded the latter by employers’ institutions, such as the chamber of commerce, trade associations, and employees’ unions. Fees were often charged for admission to these courses. Many of the training courses provided by the employers’ organizations were designed to prepare journeymen for the examina- tion prerequisite to establishing an independent enterprise as a master craftsman. Similar courses were introduced by the trade-unions, which were motivated to some extent by a desire to strengthen the bargaining power of their members as well as to improve their possibilities of promotion. During the pre-war period unem- ployed workers were admitted to these courses for employed workers, frequently with the advantage of scholarships or lower rates.

It soon became apparent, however, that exist- ing training facilities could not meet the needs of Austria in the post-war period. The unemploy- ment insurance law, which went into effect in May 1920, contained a provision authorizing the em- ployment offices to assign unemployed workers to


a technical school, a suitable plant, or any other suitable institution for retraining purposes for not more than 30 weeks. This assignment was to be made when suitable employment could not be found for an unemployed worker because he lacked the knowledge and ability necessary to perform the duties required in his occupation or another suitable occupation. Refusal to accept this vocational training or willful failure to profit from such education, once started, constituted sufficient grounds to disqualify the individual from the receipt of benefits for 12 weeks (later reduced to 8 weeks).

Even these provisions failed to cope with the growing need for large-scale retraining. The various public and private technical schools were unable to adjust themselves to the special needs of unemployed workers. Furthermore, it was felt unwise to rely on retraining in factories. The Vienna district employment security agency (Industrielle Bezirkskommission Wien)? became convinced that the only satisfactory way of pro- viding suitable retraining for the bulk of the unemployed workers was by establishing special retraining courses under its own jurisdiction. Such a program, however, required a substantial regular appropriation, and the unemployment insurance law of 1920 had failed to provide a method for obtaining such funds. Moreover, no funds were available in the budgets of the employ- ment offices, which were administered at this time by municipalities, trade-unions, or employers’ organizations.

In spite of these serious handicaps, the district agency rented barracks and initiated retraining courses for metal workers. The agency was aided by the employers’ and workers’ organizations in this trade, which voluntarily supplied both money and used equipment. When this venture proved successful, the Federal Ministry of Social Admin- istration (Ministerium fiir Soziale Verwaltung) made a special grant for extending the retraining program to all occupations.

The success achieved by the program in meeting the demands for skilled workers resulted in an

2 Similar to the State employment security agency in the United States. The agency was in charge of unemployment insurance, placement service, retraining of unemployed workers, vocational guidance, and other functions for its district, which included Vienna proper, with about 14 local offices, and Lower Austria, with about 10. It was administered jointly by repre- sentatives of employers’ and workers’ organizations appointed by the Federal Ministry for Social Administration, to which it was responsible.

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amendment to the unemployment insurance act in 1923 whereby the general contribution levied a year earlier for the maintenance of the public employment offices could be used also for financing retraining and vocational guidance.

It is necessary to distinguish clearly between training, as performed in the course of regular education or work, and retraining. Generally speaking, training is a problem of vocational edu- cation for youth; retraining applies primarily to adults, i. e., to individuals who have already com- pleted their customary schooling, insofar as the requirements of a particular occupation or trade are concerned, but who need additional training for one reason or another. This retraining may, in a narrow sense, be “refresher” training or addi- tional training in the same type of skill; or, in a broader sense, it may mean training in a different field. The first type of retraining is useful when workers have lost their skill because of unemploy- ment or employment in a different type of work. The second type becomes necessary when changes in the location and technological structure of industries have made certain occupations obsolete.

The Austrian Approach to Retraining

Many European countries have established re- training courses in order to educate adults, to pro- vide relief, and to check abuses of the unemploy- ment compensation systems. One of these ob- jectives, or a combination of them, was more influ- ential in the development of retraining programs than the desire to train workers for placement purposes.

Recognition of the need for specific retraining courses arose in Vienna, however, almost entirely in connection with the placement of workers. When openings could not be filled, an investiga- tion was made to discover why there was a dearth of qualified applicants. Investigation frequently showed that candidates who claimed to be qualified for particular occupations lacked the technical knowledge required for referral. The immediate needs of the labor market were not, however, the only factors influencing the establishment of re- training courses. Many of the courses were set up in anticipation of a future demand for qualified workers—in occupations affected by anticipated style changes, for example.

Courses were also given to young workers who were dismissed after an apprenticeship in a small,

Bulletin, October 1940

poorly equipped establishment. These workers needed further training before they could be re- ferred to large factories, which set higher standards of skill. Failure to provide such retraining would have resulted in the permanent reduction of many of these persons to the status of unskilled workers. In addition to the economic waste inherent in such a situation, a future shortage of skilled workers would often have ensued, as older workers retired from the labor market. Steps were taken to eliminate the need for retraining courses by point- ing out to the vocational authorities the deficien- cies of basic training.

While the situation in the labor market justified the organization of retraining courses, the scope and design of the course depended upon the avail- ability of a sufficient number of prospective train- ees and some assurance of suitable openings in the trade after the training period. Finally, the training had to be limited to courses that could be completed within a comparatively short period, since the worker could not easily accept work while in attendance. For this reason the maxi- mum period for such courses was generally limited to 6-12 weeks.

Although adult education is not concerned specifically with unemployed workers, it can be applied on a much larger scale to that group, particularly during periods of industrial depression.

Some of the adult education courses in Austria were of a vocational character. For instance, courses in languages proved of marked value to waiters,‘ as did mathematics courses to mechanics. While it was hoped that placement would be facilitated in the long run by the higher educa- tional standards of the unemployed workers, this particular type of training was not designed to meet an immediate demand for skilled labor.

The adult education courses were conducted under the auspices of those institutions whose functions were entirely educational and could thus be organized on a much larger scale and more inexpensively than the regular retraining courses. Nevertheless, the district agency, through its retraining department, cooperated actively by granting subsidies for certain courses or by extend-

3 According to the law, no apprentice was to be discharged, with certain exceptions, before the expiration of 3 months following the successful termina- tion of apprenticeship. This provision was designed to prevent employers from dismissing apprentices upon completion of apprenticeship, when full wages become payable.

4 These courses must be distinguished from specific language courses for waiters (and other special groups) given by the retraining department.

ing to unemployed workers attending these courses the privileges enjoyed by students of regular retraining courses, such as exemption from weekly registration and the receipt of free streetcar tickets for transportation to and from the course. The district office was also interested in such courses because they kept unemployed workers off the streets.

When large numbers of workers became unem- ployed and it was impossible to predict the dura- tion of their unemployment, many private organ- izations sought means of combating the physical and mental dangers of prolonged idleness. De- mands were made of the retraining department of the district agency that training courses for unem- ployed workers be established as a relief measure. It was felt that such courses could provide recre- ational facilities and an outlet in an integrated program to reduce the dangers of idleness and of possible antisocial attitudes which prolonged unemployment might foster.

Two general proposals for organizing such courses were made, neither of which was accepted after some experimenting. One proposal was to organize the courses along occupational lines, so that skilled workers might practice their trades and at the same time render services to other unemployed workers. The other proposal was to set up general courses in which every unemployed worker at his volition could gain basic knowledge of certain trades, such as sewing, knitting, shoe repairing, or cooking, and thus perform for him- self certain services for which he otherwise would have had to pay. Most of these courses required workshops, which would have made the courses somewhat resemble the retraining courses estab- lished for placement purposes.

The demand for the establishment of retraining courses as a relief measure was met to a certain extent when a law concerning voluntary labor service (Freiwilliger Arbeitsdienst) was enacted on August 18, 1932. This law was designed to pro- mote the voluntary labor of unemployed workers at useful projects, if the projects were conducted by public authorities or nonprofit private organiza- tions. Many of these projects were therefore somewhat in the nature of public works. The district office was authorized to continue benefit payments to unemployed workers who volunteered for such work. If it was necessary for the workers to live at the project, the benefit payments were


discontinued and the district agency granted lump sums to the organization in charge to be used for board and lodging. Among such courses in prog- ress in 1933 were courses in sewing, clothes repair- ing, shoe repairing,’ nursing, and cooking. Some of these projects were organized to provide sery- ices to needy people; others to provide basic knowledge of several utilitarian skills in order to enable unemployed workers to perform these tasks for themselves.

Specific retraining courses as a means of check- ing abuses were organized in those seasonal indus- tries where home work was customary and where availability for work and willingness to work could not be effectively checked either by the offer of a job or by individual investigation. For example, a millinery course was started each spring to which all those millinery workers who continued to receive benefits were assigned. If the course continued for more than a few weeks, it was attended only by a few of the old or physically handicapped millinery workers. Previously sev- eral hundreds of workers had continued to receive unemployment benefits over a long period, despite the seasonal upswing.

Organization of the Program

The central retraining department, established within the district agency, was in charge of the retraining of unemployed workers. The duties of the department included selection and super- vision of courses; provision of buildings and equip- ment; selection of teachers; approval of course programs; cooperation with other organizations (educational institutions, employers’ associations, and trade-unions) which were willing to sponsor retraining courses or offered special low rates to unemployed workers in their regular courses; recognition of courses conducted by other organiza- tions as retraining courses in the meaning of the unemployment insurance law;* examination of ap- plicants in cooperation with the departments of placement, unemployment insurance, and psycho- technics;? assignment of unemployed workers

Distinct from the shoe-repairing course given by the retraining depart- ment to meet the demand for well-trained shoe-repair workers.

* Official recognition allowed certain privileges to unemployed participants, such as free streetcar fare and exemption from weekly registration at the em- ployment office.

? Psychotechnics was the term used in Austria for the science dealing with the application of psychological techniques in testing the aptitude of human beings for various occupations and the adaptability of machines to use by human beings.

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to courses; purchase of equipment and material for retraining courses; calculation of prices for course products; issuance of certificates attesting to the degree of skill attained by those who attended the courses.

A workshop was attached to each occupational employment office * in or near the same building whenever possible. The managers of these offices served also as the supervisors of the retraining workshops, subject, of course, to the general super- vision of the retraining department. The dis- tribution of supervisory functions between the retraining department and the manager varied among the offices according to the ability of the manager to initiate and develop appropriate re- training methods. The close attachment of the workshops to the employment offices had advan- tages for both placement and retraining. The knowledge and experience of the placement per- sonnel could be utilized immediately in planning and establishing the necessary retraining courses. The employment offices could use the workshop equipment for testing the abilities of individual workers. Furthermore, workers who had been out of work for a long time, or well-qualified work- ers who needed a short “‘brushing up,’”’ could use the workshop to improve their speed and effici- ency before being referred to an employer.

Retraining in courses was found to be preferable to retraining by employers. Exceptions to this principle will be discussed later in connection with retraining in plants. Organized training in classes conducted by experts was generally less expensive and more effective than individual retraining by employers.

The courses lasted from 1 to 12 weeks, with 12 as the generally accepted maximum duration. Courses covering a longer period were sometimes approved in depression periods, when the longer average duration of unemployment warranted the establishment of retraining courses which needed more than 12 weeks to cover the subject. These longer courses were frequently established for white-collar workers, among whom the average duration of unemployment was particularly long. There was general agreement among all exponents of retraining, however, that, with certain minor

* The employment offices in Vienna proper, which were the most impor- tant in the Vienna district, were broken down along industrial lines. Thus

separate offices were established for metal workers, wood workers, shoe workers, clothing workers, et cetera.

Bulletin, October 1940 206275—40——2

exceptions, long-term courses should be handled by educational organizations as a part of their general program rather than by the retraining department itself.

The workers attended the courses 5 days a week for 5 hours a day. When placement opportunities were unusually good, the daily working time was occasionally extended to 8 hours, at the urgent request of those attending, in order to shorten the training period.

Admission to the various courses was usually on a voluntary basis, although the department could make compulsory assignments, mainly to check availability for or willingness to work. Com- pulsory assignments had to be made occasionally in the case of young unemployed workers whose apprenticeship training had been deficient. These workers often preferred various forms of recreation to training, an attitude adjudged tantamount to unwillingness to work, because the placement service could not place such workers in the skill for which they had registered unless they received specific retraining.

In spite of the voluntary nature of these courses, absence or misconduct connected with the course was likely to cause disqualification from receipt of benefits for a certain period.

The training courses were open to all unem- ployed workers regardless of their eligibility for benefits. Those who were eligible were allowed to receive benefits during any period of training which was approved by the proper authorities. None of these workers, however, received any ad- ditional allowance, although many of the courses required physically strenuous work. The only specific advantage offered was free transportation on the municipal streetcars to and from the work- shops. In the tailoring and dressmaking courses the workers were often allowed to bring their own material and make garments for themselves.

Teachers, instructors, and foremen were ap- pointed on a temporary basis and were selected generally from the rank and file of those actually engaged in the practical work of the plants. Only a few teachers of the basic theoretical courses had a more or less permanent tenure. Instructors for short courses dealing with the manufacture of products resulting from changes in fashion or similar causes were frequently borrowed from employers for short periods. The employer’s co-

operation was motivated to a considerable extent by self-interest, since he was directly concerned with getting properly retrained workers before the beginning of the season.

During the early stages of the retraining pro- gram, available barracks left over from the war were adapted to the needs of the courses. Since no appropriations for equipment were available at this period, most of the necessary equipment was acquired through the donation of used ma- chines and materials by friendly employers. Once it was no longer necessary to rely on these gifts, however, because of the compulsory contributions levied on employers and workers, the ultimate aim of a model workshop was more nearly approached.

The friendly reception of these courses by the general public brought about a further develop- ment. Many producers who were interested in the sale of new types of machines agreed to lend them to the retraining department, which in turn obligated itself to train particular groups of un- employed workers in their operation. Employers’ organizations also contributed machinery.

Part of the needed equipment was produced in the courses themselves through cooperation among the various specialized workshops. Thus the woodworkers’ workshop provided stools needed for the courses taken by white-collar workers, while students of accounting made the calculations necessary for the production of goods in other courses.

Advisory Committees

At least one advisory committee on training, which was allowed to use judgment independent of the district employment security agency, was set up for each industrial employment office in Vienna proper. In a few cases advisory commit- tees for subdivision of occupations within the same office were established.

The advisory committees, consisting usually of two employers and two workers, passed on the need for new courses, program of new courses, selection of teachers, supply of equipment and material, and disposal of finished goods. In only a few instances did conflicts of interest between the representatives of the employers and of the workers appear. In most cases in which there were di- vergencies of opinion as to the need and direction of training, the delegate from the retraining de-

partment was able to reconcile the conflicting points of view.

Utilization of Products

For many courses the disposal of finished prod- ucts constituted a rather serious problem. In a few cases the raw materials could be recovered for further use. Bricks necessary for teaching certain types of construction, for example, were easily recovered at the end of a particular project. When such conversion involved a serious loss of time and material, however, either of two alteratives could be followed: the goods could be considered worth- less and sold at a loss, or an attempt could be made to recover the entire value of the material and overhead costs involved. Several courses used expensive material, such as leather and fine wood, and unless a substantial portion of the cost of the materials could be recovered, it would have been almost impossible to continue conducting such courses. It was necessary, in most cases, to avoid selling the products in the open market, since maintenance of good public relations pre- cluded competition with employers.

When, however, the number of products to be sold was so small that the danger of employer opposition was slight, the retraining department was authorized to encourage orders from inter- ested persons so that the disposal of the finished article might be assured at the beginning of the course. This device was used, for example, in the cabinetmaking course, where, in addition to preparing scrap wood, the applicant participated in constructing different types of furniture. The purchasers of this furniture were required to supply their own raw material and to pay a reason- able overhead charge. Although the purchaser would probably receive a fine piece of work per- formed under expert supervision, he was never- theless running the risk of receiving an article with minor defects. He knew, furthermore, that the delivery of the order might be considerably delayed and that his actual saving for accepting these risks and inconveniences would be rather small.

Courses in which the regular training involved production of a large number of finished articles presented other problems. Although attempts were made to dispose of such products by selling them either to employees of the agency or to unemployed workers, attacks by the guilds led to

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the disposal of these goods under the guidance of the occupational advisory committee.

The procedure established by these committees varied considerably. In some cases finished products were offered to the proper guild at a price which covered the cost of the raw material and the prorated overhead costs. In the case of leather goods, for example, the employers’ organization, after paying a lump sum, assumed full responsi- bility for further disposal of the finished goods. The products of the millinery course, on the other hand, were usually sold to the employees of the district employment security office at prices which included cost of materials and production. This practice was accepted by the employer guild and the labor organizations because the output of this course was relatively small. A special method of eliminating the need for disposing of course prod- ucts was used in the retraining course for shoe- repair workers. These workers practiced on shoes which unemployed workers were allowed to offer for repair. Special precautions were taken to pre- vent abuse of this repair service by restricting each unemployed worker to one repair during a given period. The repair was noted on his identification card as well as his claim card, and the total number of repair certificates which each local employment office should issue was limited.

Coverage and Cost of the Program

The accompanying table indicates the extent of the training program of the Vienna district agency from 1923 to 1928. After 1928 the courses attracted at least 5,000 to 6,000 unemployed workers annually. The annual average number of unemployed workers receiving benefits ranged from 80,000 to 120,000 over most of the period from 1923 to 1937.

The ratio of trainees to the total number of benefit recipients varied greatly from occupation to occupation; for example, it was many times greater for white-collar workers than for metal workers while cabinetmakers and leather workers occupied intermediate positions.

The large proportion of white-collar workers taking these courses was due to a number of factors. During this period white-collar workers were affected by technological changes to a greater extent than any of the other groups, because of the widespread introduction of machines for cler- ical work. Secondly, many were required to per-

Bulletin, October 1940

Table 1.—Extent of the training program, Vienna district employment security agency, 1923-28

Number of— Total expenditures | Cost per trainee Year Courses | Trainees | Schillings} Dollars ' | Schillings) Dollars '

a 34 769 () (4) (0) @ 19243_______ 110 3, 369 19, 635 2,749 5.8 0. 82 1 te 133 3, 317 191, 26, 856 57.8 8.09 1926 4_____ : 215 4,740 | 384,730 53, 862 81.2 11. 37 = ; 253 5, 467 290, 000 40, 600 53.0 7.42 ) 154 2, 860 135,000 18, 900 47.2 6. 61

1 An Austrian schilling equaled about 14 cents during this

3 Employer associations and trade-unions provided and —_

ment; instructors were paid from various funds. After 1923 a special account. was established for retraining.

3 In 1924 a large part of the costs (particularly rent and equipment) was pee employers’ and workers’ organizations; no figures are readily a

The comparatively high cost per trainee was due to the relatively greater expenditures for equipment.

First 6 months of the year only.

Source: Die Industrielle Bezirkskommission Wien, Landesbehérde Far Arbeitsvermittlung, Und Ihre Arbeitsdmter, 1918-1928, p. 52.

form only a limited type of work (for instance, filing) and lost their ability to perform other clerical tasks, such as bookkeeping or stenography. When such workers lost their jobs after a long spell of employment, it was almost impossible to place them unless they were retrained in several clerical skills. Furthermore, it was possible to provide a greater variety of courses for white- collar workers at a substantially lower cost. It is also possible that a desire to counteract the tendency among such workers to break away from the general unemployment compensation fund and pool their own risks may have been one of the factors responsible for making extensive re- training facilities available to them.

In 1923, 29.6 percent of all trainees were less than 20 years old; in 1928 this group constituted 43.9 percent. Those over 40 years of age de- creased from 10.4 percent of the total in 1923 to 3.1 percent in 1928. The shift in age groups resulted from changed economic conditions in Austria during this period. In the first years after the World War, all age groups were almost equally affected by the extreme post-war dislocation. By 1928 the retirement of older workers, particularly in white-collar occupations, without replacement by younger workers was a major reason for the concentration of unemployment in the lower age brackets.

To give a more detailed picture of the activities of the retraining department of the district agency and an idea of the growth of the program, two reports, one for October 27, 1928, and the other for October 31, 1937, are summarized.

On October 27, 1928, 58 courses were in process, with an enrollment of 855 workers. Forty-two courses were operated by the retraining depart- ment, while 16 were conducted by various other organizations closely cooperating with the depart- ment. Eighteen of the 42 courses conducted by the retraining department were given for white- collar workers and covered such subjects as shorthand, typing, stenotypy, salesmanship, Eng- lish for salespersons, English correspondence, operation of calculating machines, railroad freight routes and charges,’ cost estimates, clerical work, drafting, and business management. The enroll- ment in these 18 courses was 452. Other courses accommodated building workers, painters, tailors and dressmakers, feather workers (on hats), beauty-parlor operators, compositors, printers, printing-machine feeders, cabinetmakers, machin- ists, metal turners, makers of optical instruments and lenses, shoemakers and shoe-repair workers, block and die cutters (for shoes), fancy leather- goods workers, leather-pattern cutters, bag makers, leather-machine stitchers, gardeners, tricycle de- livery drivers, cooks, and domestic service.

On October 31, 1937, 80 courses with an enroll- ment of 1,176 workers were in process. Thirty- three of these courses were operated by the retrain- ing department and 39 were directed by other cooperating organizations; the remaining 8 were plant retraining courses and reported an enroll- ment of 83. Of the 1,176 trainees, 138 were placed before the expiration of the training period.

Specific Problems Encountered by the Retrain- ing Department

Retraining in the plants.—Suggestions for re- training workers in industrial plants were ap- proached cautiously by the retraining department, although some of the arguments advanced in favor of such courses were convincing. It was argued in favor of plant retraining that expendi- tures for room, equipment, and instructors could be avoided ; there was more reason to expect subse- quent employment of workers undergoing training in plants; the employer’s interest in obtaining well- trained workers guaranteed satisfactory results; and employers would become more friendly

® An important subject in Europe, because of the great number of countries