RECONVERSION AND KOREA

1949-53

An anticipated postwar slump of the late forties did not come to pass. In fact, a construction and manufacturing boom started soon after wartime restrictions were lifted, and Americans soon had more than the 60 million jobs once predicted by former Vice President Henry Wallace.

In this period of national growth, the Nation was saddened by the untimely death of Secretary Schwellenbach in June 1948.

To take his place in the Cabinet, President Truman named Maurice J. Tobin, a former mayor of Boston and governor of Massachusetts, a man well-known by labor and industry alike.

Secretary Tobin's major task at the onset of his administration was one of centralizing and firming up a comparatively small departmental organization.

At the end of fiscal 1948, the Department of Labor had dropped to a total of 4,332 employees throughout the Nation-except for a period in 1940, the smallest total since before the depression.

Despite the fact that the number of its functions had increased through the depression and the war, many programs had been transferred to other departments of the Government, or had been established as separate and independent administrative organizations.

A need for a thorough review of the place and functions of the Department of Labor as a branch of the Federal executive power was indicated. Secretary Tobin determined to rebuild the Department to a strength commensurate with its assignment from Congress. As part of his predecessor's last annual report, he wrote:

"The trend toward dispersing the labor functions of the Federal Government has been opposed by the Department of Labor as administratively unsound.

"All labor functions should, as far as practicable, be in the Department of Labor.

"The Department of Labor supported the transfer of the Children's Bureau to the Federal Security Agency in 1946 but vigorously urged. . . perma. nently placing the United States Employment Service in the Department of Labor and transferring to the Department the Bureau of Employment Security of the Federal Security Agency. These agencies, which assist workers

in getting jobs and employers in obtaining workers and also administer the Federal function of the unemployment compensation system, are primarily concerned with the labor force, manpower, and problems of employment.

"These are appropriately within the statutory function of the Department of Labor, and the functions of these agencies should be coordinated with other labor functions by being placed in this Department." (1948: 5)

He pointed out that the appropriations for the remaining bureaus in the Department had been cut to an alarming degree, prohibiting their continuing their regular functions:

"One of the most damaging trends in Government during the past 2 years has been the false economy practiced in cutting appropriations for carrying out the existing functions of the Department of Labor." (1948:5)

On top of this, in July 1948, the Employment Service was transferred to the Federal Security Agency.

In February 1949 the Commission on Organization of the Executive Branch of the Government submitted a report "in which it stated that any effort to improve the organization and administration of the Government must 'create a more orderly grouping of the functions of the Government into major departments and agencies under the President.'" (1949:7)

In a later report on the Department of Labor the Commission "spoke of the Department as having been 'steadily denuded of functions' and of the 'growing tendency to set up specialized labor services outside of the Department . . . thus causing a diffusion of labor functions throughout the Government.'" The report concluded that the Department had lost much of its significance and should have transferred to it certain agencies. (1949: 8) Recommended for transfer to the Department were: Bureau of Employees' Compensation; Employees' Compensation Appeals Board; Bureau of Employment Security, including both United States Employment Service and Unemployment Insurance Service; Selective Service System; enforcement of labor standards in Government contracts; determination of minimum wages for seamen; Division of Industrial Hygiene; and "prevailing wage" research (to be conducted by Bureau of Labor Statistics).

The Commission made no recommendation regarding the Conciliation Service, because, as it said, the Congress "is engaged in revising labor policies which will affect" this agency. The Secretary thought, however, that it, too, should be brought back into the Department.

Within the next year, according to Secretary Tobin's report for 1950, the following transfers had been made to the Department of Labor: Bureau of Employment Security (USES and UI); Bureau of Employees' Compensation and Employees' Compensation Appeals Board; and authority to coordinate and enforce legislation on wages and hours on federally financed or assisted construction projects. (1950:9-10)

A significant addition was the transfer to the Secretary of Labor of all functions of all other officers, employees, and agencies of the Department of Labor. This decision, under Reorganization Plan No. 6 of 1950, made all

bureau chiefs responsible directly to the Secretary. Thus, for example, positions formerly held as commissions from the President were now placed administratively under the Secretary's control. The same plan established the position of Administrative Assistant Secretary of Labor.

The Secretary urged during this year that the Department also be given jurisdiction over the establishment of wage rates for all Federal employees in the ungraded and unclassified groups.

With the outbreak of the Korean war, the center of interest shifted, so that nothing further was accomplished in reorganization during this period. Several items remained, therefore, as unfinished business.

Manpower

Apart from the rebuilding of the Department, which, from the point of view of its history, was of immediate concern, the major development during this period from 1948 to 1953 was the Korean conflict and its implications for labor in the United States.

Starting as an international police action, the conflict began in June 1950, but quickly swelled to major proportions involving the armed manpower and full war-production activities of the United States. The questions regarding manpower raised at that time have persisted in one form or another ever since, and have been directly related to the international situation.

"The new situation was imposed on an economy which, in the middle of 1950, was utilizing a great many of its resources at or near capacity. The gross national product [was] higher than at any previous time in history. Production of steel, automobiles, and houses was setting new records. Nonagricultural employment was near the all-time high for the season, and unemployment was becoming less of a problem. Consumer incomes and expenditures were also at record levels and prices of many important commodities were beginning to rise." (1950:1)

A substantial part of the Secretary's reports for this period, therefore, reflects "the most significant manpower and other problems which our employers, our workers and their unions, and the Government have been called upon to solve in order to meet the requirements of mobilization." (1951: ix) From the point of view of the Department of Labor, the problems were to develop the largest possible labor force, utilizing all of the skills available and providing training where needed; to keep to a minimum the loss of man-hours due to work stoppages and labor turnover; to strengthen the workers by giv. ing them the assurance of economic security and high standards of working and living conditions; and to maintain the integrity of the United States in its fight against communism.

All manpower activities of the Department were coordinated through a single administrative head. Acting in accord with the nine major policy objectives published by the National Manpower Policy Committee of the Office of Defense Mobilization, set up by the President to plan overall mobi

lization policies for the Nation, the Department concentrated on the manpower program for essential civilian and defense production needs.

It gave special attention to the training and use of workers having specialized skills essential to defense mobilization. It sought to create a demand for labor in labor-surplus areas through decisions affecting production, procurement, and the location of facilities and materials. The public employment offices were recruiting more people and encouraging them to transfer to jobs where they could contribute more to the defense effort. By intensive programs of recruitment, training, upgrading, and utilization, it relieved manpower shortages in critical occupations, and sought to meet the special manpower requirements of military-production industries. It stimulated programs of industrial safety and health. Statistics regarding prices and wages were made available to the stabilization boards. Numerous studies and reports were made on special manpower problems. Data for use in the Nation's international programs were in continuous preparation. In addition, considerable work was done to provide labor attachés abroad with information useful to them in countering Communist propaganda. (1952:4-5)

Specifically, the administration and operation of the manpower mobilization program were developed on the following basic policies:

"(1) The size of the Armed Forces will be determined in accordance with requirements to meet strategic plans with full information on the manpower requirements for defense production, agriculture, civil defense, and other essential purposes.

"(2) The supply of persons possessing critical skills will be distributed among military and civilian activities in a manner which will contribute most to the mobilization program, and the relative need of the Armed Forces and of essential civilian activities will be taken into account in the recruitment of individuals, the call-up of reserves, and the induction of individuals under Selective Service.

"(3) Provision will be made for deferments from military service of a sufficient number of individuals in educational and training institutions to provide a continuing supply of professional and highly skilled man

power.

“(4) Recruitment, placement, distribution, training, and utilization of the civilian labor force will be based primarily upon voluntary measures for manpower mobilization.

"(5) Government manpower controls will be used only when and to the extent they are necessary to assure successful execution of the mobiliza tion program.

"(6) Manpower programs will be geared to the needs and problems of specific areas.

"(7) Full use will be made of domestic manpower resources before bringing in foreign workers.

"(8) Whenever feasible, production facilities and contracts will be allocated at the sources of labor supply in preference to moving the labor supply.

"(9) The full understanding and assistance of labor organizations, employer associations, professional societies, civic and community groups, and State and local governments will be sought in carrying out manpower functions." (1951: 24-25)

As military operations quieted down after the Korean armistice talks in 1953, so the manpower program receded into the background. Some of the questions which it had raised—the need for education and training at higher levels than before; the need for recognition of the productive work capacities of older workers, women, and minority groups as part of the Nation's work force; the need for a more comprehensive program of international labor relations—these remained to be understood, explained, and developed. International Labor Affairs

Writing before the outbreak of the Korean War, and referring to World War II, the Secretary commented on the international relations aspects of the Department's work:

"One of the most striking developments since the war has been the emergence of labor as a major political factor throughout the world. In Western Europe, for example, labor parties play major roles in many coalition governments, and in some cases there are labor governments. The importance of labor abroad politically, coupled with its tremendous social and economic significance, makes expert knowledge of foreign labor developments an essential element in the conduct of United States foreign policies. International affairs can no longer be considered as separate and distinct from domestic affairs; the two are inseparable. Domestic policies have a direct bearing on foreign affairs and conversely foreign developments affect the domestic situation. Consequently, the Department of Labor, which is responsible for the labor policies of the United States Government, is concerned with the international as well as the domestic aspects of labor affairs." (1949: 14)

Four years later, with fuller appreciation of the Communist menace, and mindful of the rapid change of recent events, he wrote:

"Today's growing appreciation of the vital significance of the labor factor in our country's foreign relations is of surprisingly recent origin. The first American labor attaché was appointed but 10 years ago. Only in 1946 was an assistant secretary appointed to assume responsibility for the international activities of the Department of Labor, and in 1947 the Office of International Labor Affairs was established.

"As this attention to labor's impact upon foreign affairs has expanded, however, so have the Department's functions and activities in international

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