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VI. NORMAL JOB TURNOVER

Industries are differentially affected by general economic conditions as well as by competitive imports. For instance, a decline in personal income caused by overall economic policy may lead to a decline in the demand for durable goods like television sets or automobiles, more than for food or apparel. Such effects, of course, take place regardless of the pace of import increases and may exceed the possible decrease in employment caused by a change in imports for a particular industry.

Other kinds of employment dislocation take place even in time of high demand and full employment. People are moving from job to job and are temporarily unemployed. In 1969, 10.6 million persons with work experience were unemployed for at least one week.3 The average displacement of 1 billion dollars of imports is less than one percent of this number. Because of the high level of economic activity, most of these people were able to find jobs, as the average level of unemployment for the year was under 3 million.

The movement of people in and out of jobs occurs in all industries as some workers are temporarily laid off and others quit. The amount of unemployment that can be absorbed by each industry without necessitating layoffs can be estimated by the rate of voluntary separations or quits.

These can be translated into the level of imports that might be absorbed by each industry by attrition-not replacing employees who leave. Table 3 is based on quit rates for the manufacturing sector in the year 1965. That year was chosen because it is a representative year. In the following years the quit rates were much higher because the economy was more fully employed; quit rates are inversely related to the unemployment rate.

Quit rates are reported as monthly averages of quits per hundred. Use of this rate for estimating the number of people leaving per year assumes that it is always the same job that is quit and results in a minimum estimate. If one assumes that in each month it is always a different job that is vacated, the monthly averages would be totaled for the year, resulting in a maximum estimate of the number of people leaving.

The number of jobs vacated monthly or annually is not the same as the total number of jobs that might be available for permanent placement. It is probable that a small proportion of jobs in a plant, the least desirable in terms of pay, account for most of the quits. The true number of jobs that would be eliminated by attrition is somewhere between the two extreme measures but probably closer to the lower number.

The estimated number of employees quitting can be translated via the employment/output coefficient for each industry into the level of imports that could be supported by quits. These levels can be compared

* BLS, Work Experience of the Population in 1969, Advance Summary of Special Labor Force Report.

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TABLE 3.—Imports and Normal Turnover of Manufacturing Industries, 1965

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1 Industry classification from 1958 input-output table.

* Competitive imports, domestic port value. Industries 23 and 50 show no competitive imports for reasons of classification.

3 Quit rates from BLS, Employment and Earnings, March 1966; industry detail aggregated to input-output classification. Number of employees quitting computed by applying quit rates to 1965 employment in each industry. Employment converted to values (in 1958 dollars) by BLS employment/output coefficients.

to the actual level of imports for that year. This is done in Table 3. Using the most conservative estimates, that is the monthly figure, Table 3 shows that imports in individual industries taken separately could increase by from 20 to several thousand percent before the employment effects of import displacement would exceed normal departures.

VII. CONCLUSION

These comparisons would seem to indicate that in the aggregate, a reasonable estimate of the employment displacement of imports is modest when viewed in the perspective of employment changes which normally take place in our dynamic economy. However, imports may have significant employment effects on specific industries, plants, and geographic areas of the country.

PRODUCTIVITY AND UNIT LABOR COSTS
IN EXPORT AND IMPORT-COMPETING
INDUSTRIES, 1958-68

Prepared by the Bureau of Labor Statistics

I. INTRODUCTION. II. SUMMARY AND HIGHLIGHTS. III. TRENDS
IN PRODUCTIVITY AND UNIT LABOR COSTS.

I. INTRODUCTION

In answer to a request by the President's Commission on International Trade and Investment Policy, the Bureau of Labor Statistics examined trends in output per man-hour and unit labor costs in two groups of U.S. manufacturing industries: Those in which exports are an important part of domestic output and those in which imports are an important part of new supply (domestic output plus imports). In this examination, the Bureau has tried to determine whether or not these industries are characterized by patterns of change in productivity or unit labor cost that differentiate them from each other as well as from manufacturing in general. To accomplish this task, it was first necessary to develop a list of industries where exports were important and a list of industries that were facing a high degree of import competition, and second to develop measures of output per man-hour and unit labor cost for these industries over time.

Selection of Export and Import-competing Industries

The majority of U.S. manufacturing industries probably engage in foreign trade to some extent-studying productivity and unit labor cost behavior in all of them would not be much different from studying manufacturing industries in general. Consequently, various criteria were employed to produce meaningful lists of export and import-competing industries.

The list of export industries included those industries where exports of the products they produce represented 10 percent or more of the value of domestic output of those products, wherever made.1 It also included those industries where exports represented at least 6 percent

1 Export values are values at the point of export; they are based on selling price and include inland freight, insurance, and other charges to the point of export.

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