The Scale of Relief
The fundamental difficulty of the problem of relieving unemployment is a very old one. It turns upon what used to be called, ninety years ago, “the principle of less eligibility,” the principle that the position of the man who is unemployed and receiving support from the community should be made upon the whole less eligible, less attractive than that of the man who is working and living upon the wages that he earns. That is a principle which has been exposed to much criticism and denunciation in these modern days. We are told that it is the false and antiquated doctrine of a hard-hearted and coarse-minded age, which thought that unemployment was usually a man’s own fault, which saw a malingerer in every recipient of relief, which was obsessed by the bad psychology of pains and penalties and looked instinctively for a deterrent as the cure for every complex evil.
But, however that may be, this principle of less eligibility is one which you cannot ignore. It is not merely or mainly a matter of the effect on the character of the workmen who receive relief. The danger that adequate relief will demoralise the recipient has, I agree, been grossly exaggerated in the past. Prolonged unemployment is always in itself demoralising. But, given that a man is unemployed, it will not demoralise him more that he should receive adequate relief rather than inadequate relief or no relief at all. On the contrary, on balance, it will, I believe, demoralise him less. For nothing so unfits a man for work as that he should go half-starved, or lack the means to maintain the elementary decencies of life.
But there are other considerations which you have to take into account. If you get a situation such that the man who loses his job becomes thereby much better-off than the man who remains at work, I do not say that the former man will necessarily be demoralised, but I do say that the latter man will become disgruntled. I do not want to put that consideration too high. At the present time there are many such anomalies; in a great many occupations, the wages that the men at work are receiving amount to much less than the money they would obtain if they lost their jobs and were labelled unemployed. But they have stuck to their jobs, they are carrying on, with a patience and good humour that are beyond all praise. Yes, but that state of affairs is so anomalous, so contrary to our elementary sense of fairness that, as a permanent proposition it would prove intolerable. We cannot go on for ever with a system under which in many trades men receive much more when they are unemployed than when they are at work. On the other hand, the attempt to avoid such anomalies leads us, so long as we have a uniform scale of relief, against an alternative which is equally intolerable. Wages vary greatly from trade to trade; and, if the scale of relief is not to exceed the wages paid in any occupation it must be very low indeed. That is the root dilemma of the problem of unemployment relief—how if your scale of relief is not to be too high for equity and prudence it is not to be too low for humanity and decency. We have not, as some people imagine, done anything in recent years to escape from it, we have merely exchanged one horn of the dilemma for the other.
In any satisfactory system the scale of relief must vary from occupation to occupation, in accordance with the normal standard of wages ruling in each case. But it is very difficult, in fact I think it would always be impracticable to do that under any system of relief, administered by the State, either the Central Government or the local authorities. It must be done on an industrial basis; each industry settling its own scale, finding its own money, and managing its own scheme. That is an idea which has received much ventilation in the last few years. But the really telling arguments in favour of it do not seem to me to have received sufficient stress.
Foremost among them I place the consideration I have just indicated: that in this way, and in this way alone, it becomes possible for work-people who receive high wages when they are at work, and where habits of expenditure and standards of family living are built up on that basis, to receive when unemployed, adequate relief without that leading to anomalies which in the long run would prove intolerable. But there are many other arguments.