suffering severe and sustained long-term declines in production and employment. These declines have resulted from broad economic and technilogical developments which have affected entire industries. A. Contraction of basic industries The drop in employment in the anthracite and bituminous coal-mining industries, which started nearly 30 years ago, constitutes by far the most important factor in the development of chronically depressed areas in Pennsylvania. The anthracite coal region in northeastern Pennsylvania has been the victim of a shift in consumer preference of household heating fuel to oil and gas. In addition, joblessness has spread as a result of the depletion of coal deposits in many mines and the reduction of manpower required in mining coal through technological improvements. The bituminous coal fields of midwestern and southwestern Pennsylvania have experienced a similar decline for much the same reasons. Competition from low-grade fuel oil for industrial and transportation use has been largely responsible for the reduction in demand for soft coal. In addition, the beehive coke industry, companion to the soft-coal industry of southwestern Pennsylvania has been gradually supplanted through the more economical production of byproduct coke. Employment in the State's coal mines, which was 360,000 in the 1920's, had been reduced by half in 1947, when 185,700 were employed. Another reduction of more than half took place between 1947 and 1956, when 76,700 workers were employed, 109,000 fewer than in 1947 (table 7). Substantial declines in employment also occurred in the State's textile industry (from 150,100 in 1947 to 98,800 in 1956, a reduction of 51,300) and in railroad transportation (from 152,800 to 109,200, a decline of 43,600). Other industries which have contributed to the difficulties of various areas in the State include transportation equipment, apparel and metal manufacturing. B. Considerable dependence of Pennsylvania counties on 1 or 2 employers makes them economically vulnerable Many of the communities in Pennsylvania are particularly vulnerable to economic reverses since they are dependent upon the economic destiny of 1 or 2 employers. Should technology, consumer demand or location advantages for the special products of these 1 or 2 large plants change as they might well with the shift to lighter metals, the economies of these areas would be endangered. In all, 23 of the State's 67 counties, the 2 largest companies accounted for 50 percent or more of the manufacturing shipments in 1954. Of the 9 counties with less than 1,000 manufacturing employees, 6 were ones in which the largest 2 companies shipped 50 percent or more of the total value of shipments. The State's counties were distributed as follows: The State and the Federal Government must be prepared both to help redevelop these areas or to help if economic reverses close these plants. C. Impact on individual industrial areas 1. Major areas Altoona.-The shift from steam to diesel and electric locomotive power has been largely responsible for the decline of this area, which had been predominantly engaged in production and repair of steam locomotives. Erie.—Cutbacks in machinery manufacture (electrical and nonelectrical) were responsible for classifying this highly industrialized area as one of substantial labor surplus in 1954-55. The recurrence of this classification in the second half of 1957 was due to the same factors, plus reductions in primary metals and railroad equipment. Johnstown. The drop in bituminous coal mining has more than offset rising employment in primary metals (basic steel) and apparel. Scranton.--Anthracite coal mining had dominated the area's economy until the late 1920's. The working out of mines and the displacement of coal by oil and gas for heating have been largely responsible for the decline in this area. The local campaign to attract new industries has resulted in the establishment of a number of new plants. However, many of these are apparel and textile plants, employing mostly women, so they have not fully offset mining job losses. Wilkes-Barre-Hazelton.-The principal causes for the decline of this area are the same as in the Scranton area. 2. Minor areas Berwick-Bloomsburg.-Decline in area's dominant plant (railroad equipment manufacturer) and in textiles has caused distress in this area. Clearfield-DuBois.-Depletion of bituminous coal mines is largely responsible for depressed condition of this area. Lewistown.-Dependent upon 3 leading industries for 80 percent of its manufacturing employment (rayon yarn, iron and steel forgings, and apparel) this area has not expanded employment in line with growth in its labor force. The rayon yarn plant which accounted for one-third of the factory jobs has been contracting as a result of displacement of rayon by newer synthetic fibers. Lock Haven.-Dieselization of rail equipment has reduced need for personnel at local railroad repair shops. Closing of apparel plant and reduction in electrical equipment production have also contributed to area unemployment. Pottsville. Decline in anthracite coal mining has depressed this area. Almost half of factory jobs are in apparel. Sunbury-Shamokin-Mount Carmel.-The closing of two large plants (electrical machinery and textiles) has added to the problems left by the decline in anthracite coal mining. Uniontown-Connellsville.—Decline in bituminous coal mining and gradual supplanting of companion beehive coke industry by more economical byproduct coke have created heavy unemployment. D. Underemployment in low-income rural areas In rural or predominantly rural areas the rate of unemployment is inadequate as an index of economic conditions. Depressed conditions in agriculture do not usually result in high unemployment rates. Farm residents holding nonfarm jobs are not usually counted as unemployed if they lose such jobs as they generally engage in sufficient chores around the farm to be classified as employed. Furthermore, many persons in these areas who would be working or seeking work if jobs were available are not actively looking for work because they know it is not available and are consequently not counted as unemployed. The most significant measure of basic economic conditions in rural areas is income. Low incomes reflect underemployment, i. e., employment in jobs which occupy only a part of the workers' available time or permit only partial utilization of their capacities. The Department of Agriculture has made a study of the counties in the United States which are not part of labor market areas as defined by the Bureau of Employment Security and which are suffering from low income in the sense that the average family income is clearly inadequate to provide a decent level of living. The tests for classification of rural counties as "low income" were that the median income for all families and unrelated individuals in 1949 was less than $1,400, or the median income in the rural nonfarm population was less than $1,500 or the median income in the rural farm population was less than $1,250. Fulton county in Pennsylvania, an entirely rural area in 1950, was classified as "low income" under these tests since the median income in 1949 was $1,375 and the median income in the rural-farm population was $1,100. This county is Pennsylvania's underdeveloped community. III. EFFORTS MADE TO REHABILITATE DEPRESSED AREAS A. State and local groups Eighty community nonprofit corporations in the 12 labor-surplus areas of the State are engaged in various developmental activities, including economic survey, industry-promotion campaigns, fund-raising and plant-building programs. Plans for the following have been approved : 112 factory buildings built; $44 million spent for construction; The funds used for constructing new buildings have come from banks (55 percent) and local subscription (45 percent). In the Scranton area, site of the State's most successful community program, $4 million has been raised by local subscription. The State government provides guidance and assistance to local groups and performs the following functions: 1. Conducts economic and labor market surveys. 2. Disseminates information regarding industrial assets. 3. Seeks to steer new industries and contracts into depressed areas. 4. Seeks to procure Government installations and defense facilities for these areas. 5. Accelerates various programs to assist residents of depressed areas (e. g., roadbuilding, hospital construction, stream clearance, slum clearance and public housing, port improvement, flood control, water resources, conservation and development of timber and mineral resources). 6. Industrial development authority makes loans for industrial plants to nonprofit development agencies in areas with not less than 6 percent of the labor force unemployed for a period of not less than 3 years or 9 percent for not less than 18 months. A revolving fund of $8 million has been set up for this purpose. Since the authority's organization in August 1956, commitments have been made for 28 community building projects, with loans amounting to $4,162,279. The total cost of these projects will be approximately $10 million. They will provide 6,062 new jobs. These loans are made on a long-term basis. They may run up to 30 percent of construction costs. The community corporation provides at least an additional 20 percent, and the remainder usually is derived from first-mortgage loans from banks or insurance companies. The authority retains the status of a second mortgagor. The industrial tenant or purchaser must be a responsible firm and provide all the machinery and equipment. B. Federal programs The Federal Government has contributed to the reduction of unemployment in the 11 areas of chronic labor-surplus as follows: 1. Military supply contracts between March 1952 and December 1956 totaled $230 million, of which $6.7 million were contracts placed as a result of preference for labor-surplus areas. 2. Special accelerated tax amortization for new plants in labor-surplus areas has been granted in the amount of $20 million as of March 6, 1957; these plants have provided 1,710 new jobs. IV. CONCLUSION In spite of the efforts of State and local groups in Pennsylvania's areas of chronic labor surplus, high rates of unemployment have persisted. In all but one of the areas for which information is available, nonagricultural employment was lower in the first half of 1957 than in 1953 (table 8). In the one area in which employment increased during this period (Erie), the gain was small (700 workers) and it was wiped out by the decline in jobs in the second half of the year. The average number of unemployed in the 11 areas of chronic labor surplus in the 2 years ended July 1957 was 71,900. This amounted to 10.7 percent of the labor force. In order to reduce unemployment to 3 percent of the labor force in these areas, 51,656 additional jobs are needed. From the record of State and local activities to date, it is evident that the funds available from these sources are insufficient. Various aspects of the problem transcend State boundaries. They are sectional, and even national, in scope. Consequently, they are not susceptible to State and local remedies. Federal cooperation and support, such as is provided under the Douglas bill, are needed to supplement the efforts of the State and local communities. TABLE I.-Usual labor-supply classification of areas of substantial labor surplus in Pennsylvania, 1953-571 1 Major areas are classified as follows: C-Unemployment between 3 and 5.9 percent of total labor force. Smaller areas are classified "S" if unemployment is 6 percent or more. 2 Current classification system was instituted in 1951. Source: U. S. Department of Labor. D-E D E-F E C-D C-D 00000000 000000 TABLE II.-Number unemployed and percent of civilian labor force unemployed in Pennsylvania, 1953–57, by substantial labor-surplus area TABLE III.-Average weekly number of continued unemployment-compensation claims, and claims volumes as a percentage of unemployment compensation covered labor force, in areas of substantial labor surplus in Pennsylvania, 1953-561 1 Based on March 1955 unemployment compensation covered labor force. Source: Pennsylvania Department of Labor and Industry. TABLE IV.—Unemployment compensation benefits and public assistance payments in areas of substantial labor surplus in Pennsylvania, 1953–561 Source: Pennsylvania Department of Labor and Industry and Department of Public Assistance. 25491-58- -54 |