Unemployment Relief in Great Britain

A Study in State Socialism

Felix Morley

• Publisher: Taylor & Francis
• Year: 2019
• Print ISBN: 9780367179540
• eBook ISBN: 9780429602948
• Edition: 1
• Topic: Economics
• Subtopic: Labour Economics
• Index: Economics

Originally published in 1924, Unemployment Relief in Great Britain takes up the history of unemployment relief in Great Britain, focusing on the after effects of the post-war period and the Great Depression. Primarily, the book provides a detailed study of England's experience with compulsory unemployment insurance and public employment exchanges. The book provides an intriguing study that will appeal to sociologists and historians alike, adeptly weaving practical aspects of the insurance acts, and the administration of employment exchanges.

CHAPTER VI

INDICTMENTS FROM THE DEPRESSION PERIOD

NOTHING inspires misleading conclusions more readily than a mere record of the legislation of abnormal times, set out without reference to formative conditions. Supplementing what has already been said on the subject, it is therefore advisable again to emphasize the magnitude of the problem with which the State unemployment relief program was confronted from the autumn of 1920. This can be done clearly and briefly by a study of the following table and chart, compiled from Ministry of Labor statistics. The table shows the annual fluctuations in the percentage of unemployment among those trade unions making returns to the Ministry of Labor, from the beginning of the present century up to 1924. The chart carries these statistics back to the year 1874 and presents the whole material graphically.¹

TABLE V. FLUCTUATIONS IN TRADE-UNION UNEMPLOYMENT, 1900–24

Three points worthy of particular consideration for an estimation of the inevitability of unemployment insurance collapse are brought out by the chart. The first, that the mean percentage of unemployment during 1921 and 1922 was almost exactly twice as great as that of the previous depression period in 1908 and 1909, while even in 1923 the mean percentage of unemployment exactly equalled the evil record attained in 1879. It is, therefore, no more than just to call the unemployment of the post-war period unprecedented.

The second point to be observed is that the nine-year period 1912–20 (inclusive), during which the State system was supposed to be preparing for its time of test, contained four years in which unemployment was practically nonexistent, while in the remaining five years it was well below the mean of the period 1875–1911. The third point is, that if 1904 is counted as a depression year — which it undoubtedly was — there had been at the end of 1920 a longer stretch in which to prepare for the seemingly inevitable cyclical depression than in any other period of good employment recorded. It is, therefore, no more than just to say that the post-war depression followed a period in which the absence of unemployment was, in modern times, unprecedented.

MEAN UNEMPLOYMENT FROM 1912 TO 1923 NOT ABNORMAL

Care must be taken, moreover, not to attach undue importance to the height reached by the unemployment percentage in 1921–22. The problem is bi-dimensional — the horizontal measurements must be given adequate consideration if a just verdict is to be reached. To illustrate the importance of duration the chart also shows the mean percentage of employment during the two periods January, 1875, to December, 1911 (pre-insurance) and January, 1912, to December, 1922 (insurance). Mean unemployment over a pre-insurance period of thirty-seven years was exactly five per cent. In the insurance period up to January, 1923, when the State-operated system had ceased to be insurance in all but name, the mean unemployment was 4.28 per cent, or lower by more than seven tenths of one per cent than the mean unemployment for the first period. In other words, the national unemployment insurance system proved unable successfully to outride a cycle from the end of one depression to the turning-point of the next (as the chart shows plainly), during which the mean unemployment was less than that of the preceding thirty-seven years. Even if we are unfairly generous and take the mean unemployment of the insurance period up to January, 1924, the situation is not materially altered. The average for the second period is still less than that for the first: 4.88 per cent as against 5.00 per cent.

CHART I. FLUCTUATIONS IN TRADE UNION UNEMPLOYMENT, 1875–1923.

It may be said, then, that State-operated unemployment insurance was unable to stand a strain no heavier than should have been anticipated. But to have shown this is not at all the same thing as showing that the ineffectiveness during the post-war depression was inevitable. There is a very real danger that because of the record of degeneration of the Government system an indictment against the whole principle of unemployment insurance may be drawn. Such an indictment on the evidence which has been put forward would be a...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Copyright
• Dedication
• Table of Contents
• I. THE ORIGIN OF THE EMPLOYMENT EXCHANGE SYSTEM
• II. THE ADVENT OF STATE-OPERATED UNEMPLOYMENT INSURANCE
• III. UNEMPLOYMENT INSURANCE DURING THE WAR AND DEMOBILIZATION
• IV. THE ACT OF 1920 AND THE BEGINNINGS OF INSURANCE BY INDUSTRY
• V. THE DEGENERATION OF STATE-OPERATED UNEMPLOYMENT INSURANCE
• VI. INDICTMENTS FROM THE DEPRESSION PERIOD
• VII. THE JUSTIFICATION OF THE BRITISH SYSTEM
• VIII. THE WORK OF THE EMPLOYMENT EXCHANGES
• IX. THE BURDEN ON THE EXCHANGES
• X. UNEMPLOYMENT STATISTICS
• XI. THE LESSON FOR THE FUTURE
• APPENDIXES
• SOURCES
• INDEX