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NATIONAL OUTPUT AND LABOR INPUT
The expansion of production since 1929 has been accompanied by
NOTE: BROKEN LINES SHOW ESTIMATES BASED ON DATA WHICH ARE FRAGMENTARY BUT WHICM INDICATE
SOURCES: DEPARTMENT OF COMMERCE, DEPARTMENT OF LABOR, AND COUNCIL OF
Vast resource development projects and conservation programs have been undertaken in the past quarter-century, some public, some private, and many a mixture of the two. Public construction expenditures for flood control, navigation improvements, agricultural land reclamation, hydroelectric power facilities, and soil and forest conservation have increased more than 300 percent in real terms. Multiple-purpose development of the Tennessee, Columbia, and other rivers has been far advanced. Huge additional amounts are being invested in atomic energy. Private mining, timber, and other concerns have increasingly adopted conservation practices, and have invested heavily in research and development. Individual farmers, frequently aided by the Government, have greatly enlarged their investment in their own land. Production and consumption of nearly all raw materials have increased since 1929. These developments have enormously enlarged the productive power of our factories and farms, helped to power and equip the American home with the most modern conveniences, and correspondingly lifted the standard of living.
The Nation's progress is shown also in greatly increased earnings and improved living standards. In 1929, average annual income after taxes was a little more than $1,000 per capita, while last year the average was about $1,500—again measured in 1952 prices. It should be noted that, while the real buying power of individuals was rising, the population of the United States increased by about 35 million. Our economy now provides much inore for many more people.
The greatly improved living standards which have been achieved during the past quarter-century are evident in more tangible data than the number of dollars earned or spent.
In 1929, there were 23 million automobiles in use, and in 1952 there were 44 million. In the same span of time, the number of homes with a mechanical refrigerator increased from about 10 to 80 percent. The number with radios increased from 40 to 96 percent, and 40 percent now have television sets. Compared with 10 percent in 1929, nearly 90 percent of all farms are now electrified.
During the era as a whole, we have built 12 million new nonfarm homes, most of them since World War II. Home ownership increased from 48 percent of all families in 1930 to 55 percent in 1950. Terms of housing finance have improved greatly, bringing home ownership within the reach of lower income groups, and also facilitating construction of apartments and other houses for rent. In the blighted sections of cities, a hopeful number of slum clearance and redevelopment projects both public and private have been undertaken, though far from enough.
And the record has not been written in total quantities alone, whether of dollars, automobiles, or houses. The products of our economy are now far better distributed than they used to be. Adequate statistics do not go back to 1929. But since 1935–36, the real incomes of families and single persons in the lowest two-fifths of the income range have increased 90 percent, while the increase in the top fifth has been about 40 percent. This improved distribution is not only a mark of social progress and increasing human contentment; it is also a vital underpinning of sustained and advancing general prosperity for all sectors of the economy.
Economic justice and the higher values
Improved and more widely available education, medical care, and economic security are among the cherished features of the American way of life. So are the basic freedoms, full enjoyment of which depends upon
SOURCES: DEPARTMENT OF COMMERCE, DEPARTMENT OF AGRICULTURE, EDISON ELECTRIC
INSTITUTE, AND COUNCIL OF ECONOMIC ADVISERS.
progressive removal of discriminatory practices in the market place and elsewhere. These are higher values in the sense that they are abiding objectives of policy and action. But they also undergird the economic and moral strength of the country. They provide the source of a strong, healthy, and skilled labor force, and an imaginative and responsible management. They provide a motivation for economic growth.
Although the pursuit of these values during the past quarter-century has been interrupted by depression, world-wide war, and the necessities of the defense build-up, considerable headway has nonetheless been made.
Total educational expenditures, in constant prices, have about doubled since 1929. Capital outlays for public schools, again in constant prices, have gone up 63 percent in the same period. Teachers are better trained, curriculums have improved, and schools are designed for more effective learning
Total per capita expenditures for health and medical services have nearly doubled during this era, after adjusting for price change. Outlays for hospital construction, both public and private, have risen about 83 percent. There is one doctor for
740 persons now, compared with one for every 800 in 1929. Expenditures for medical research mounted to nearly 200 million dollars in 1952. The quality of medical care has improved with the development of new drugs, better techniques of surgery and hospital treatment, and the extension of preventive medicine.
It has been essential to do justice to those who have fought to defend us against enemies. Since 1929, the number of veterans has increased from 4.7 million to 19.7 million. Veterans and their families now comprise 40 percent of the total civilian population. Some 7.8 million veterans have received education and training aid since World War II, and an additional 600,000 have received vocational rehabilitation training. Increasing numbers of Korean war veterans will be receiving similar help. Unemployment insurance has been paid to about 9 million veterans. Farm and business loans, and housing mortgage guarantees and loans, have also helped
Progress in social security has been significant, with the advent in the mid-1930's of old-age insurance, unemployment insurance, and new and improved public assistance programs. The Federal old-age and survivors insurance program covers 45 million persons, while Federal-State public assistance is available for dependent children, the blind, needy old persons, and the permanently and totally disabled. The Federal-State unemployment insurance system now covers about 35 million jobs.
The eventual elimination of discrimination based on race, religion, economic status, or section of the country is a continuing objective of national policy. Discrimination is in part economic in origin, and can be reduced by economic measures. Throughout the past quarter-century, particularly as part of the economic and social reforms of the thirties, great though insufficient gains have been made.
Workers have been guaranteed the right to organize and bargain collectively. The Fair Labor Standards Act established the principle of minimum wages and maximum hours. Fair employment practices acts have been passed in some 12 States.
Economic justice for American agriculture has advanced tremendously since the period just before the great depression. Vast conservation programs, intensified agricultural research, loans and assistance to farm families, especially low income families, price supports to reduce instability, and rural electrification have combined to improve rural life. Since 1929, per capita farm income in constant dollars has increased about 80 percent. The gain here has been relatively large, because the farmer had been left so far behind during the uneven prosperity of the late 1920's.
Opportunities for business have also widened, particularly as a result of the unprecedented period of prosperity since around 1940. There were only a third as many business failures in 1952 as in 1929, even though the number of business firms in operation has increased by one-third. In this quarter-century, while wholesale prices rose 80 percent and consumers' prices 55 percent, corporate profits rose more than 300 percent before taxes and more than 100 percent after taxes.
Working conditions have benefited enormously under the joint impact of union efforts, business policies of sharing productivity gains, and government programs. For factory workers with three dependents, the increase in average weekly take-home pay (after allowing for the taxes paid by a family of this size) has been from $39 to about $63, measured in 1952 prices.
Reinforcements against economic fluctuations
During recent weeks, a variety of commentators far and wide have noted the profoundly protective and stabilizing elements which have been built into our economic system during the past quarter-century. There is now a rather prevalent view that the danger of any economic setback getting out of hand during the next few years is minimized by broader and fairer distribution of income among individuals and economic groups; a more progressive tax system which automatically adjusts in part to changes in business conditions; a level of public expenditures which, while we all want to see it lower as soon as world conditions permit, stabilizes demand and stimulates private investment; unemployment compensation and the rest of the social security system; farm price supports; a far more shockproof system of banks and securities exchanges; the greater firmness of wage rates due in part to strong unions; and more enlightened business practices with respect to pricing, marketing, collective bargaining, and investment planning. And not the least of the stabilizing effects of these programs is the increasing confidence in the maintenance of prosperity which they inspire.
Much remains to be done
Despite these great gains, many of our domestic economic problems have not been solved, some things should have been done better, many inadequacies still exist, and above all, the task of maintaining and advancing the rate of progress and forging new tools to meet new needs is always with us. In addition, while the current defense build-up is near its peak, the new problem of America's role in the world economy presses for solution. This problem will long endure, and it will call for many further changes in our thought and action.