This leads to another point to which I wish to attract special attention. Unemployment is generally regarded as a purely temporary evil. Indeed, the New York Times took me to task for speaking of it as a permanent evil.[38] The reason for this widespread error is that permanent unemployment is a thing to which we have grown accustomed. Charitable societies are familiar with it and know that it exists all the time; but it is only when unemployment adopts gigantic proportions so that the unemployed crowd our parks and streets and even indulge in public demonstrations, that the public becomes aware of it. And it is not only the regular operation of the industrial threshing machine that produces the unemployed and unemployables; it is the character of certain industries and occupations such as seasonal industries—for example, carpentering and casual occupations, such as stevedores and longshoremen. Mr. Beveridge gives a very graphic picture of the unemployment on the London docks:[39]
Most of us have heard of the great Dock Strike of 1889, and of the distinguished men who undertook to settle it. Efforts were made then to regulate work on the wharves, and while these efforts did improve the condition of the best of the men, as Mr. Beveridge says, "it is seldom realized how small a proportion of the total field of dock and wharf labor is really covered by the reform."[40]
He attributes the maintenance of evil conditions still prevailing on the docks to the "separation of the interests of wharfingers, shipowners, and contractors," to our old enemy—competition.
To appreciate the evil effects of casual or irregular employment, we have again but to quote Mr. Beveridge:
"The knowledge that any man, whatever his experience, however bad his antecedents, might get a job at the docks, attracted to their neighborhood a perpetual stream of blackguards, weaklings and failures from other every occupation. The experience, soon made, that regular attendance was not necessary to secure selection on days when work happened to be plentiful, and the daily alternations of hard exercise and idleness rapidly developed in those who came, if they had it not before, the greatest irregularity of habits, and physical or moral incapacity for continuous exertion. The low physique and half-starved condition of many of the laborers made their work dear at 4d. an hour."[41]
Here he falls in with the evil feature of the competitive system which has been described as gambling with nothing less for stakes than life, health and happiness: "Finally," concludes Mr. Beveridge, "the door is opened to abuse of patronage; convivial drinking and even direct bribery are not unknown as a means of securing employment."[42]
The form of bribery paid by employees when of the female sex is a still darker side of this dark subject.[43]
Another permanent cause of unemployment is underemployment and underpayment. In many occupations, such as coal mining, underemployment is averaged over a year so as to cause little unemployment but much distress; the high wages which the miners are able to stipulate for through their trade unions are reduced by diminishing the days of work in the year. In other occupations underemployment and underpayment reduce employees to a state of starvation, which of course swells the rank of the unemployables.
Having seen how the pressure of the market forces factory owners to overwork their employees and to dismiss all who are not able to earn the wages they receive; how casual employment creates and keeps alive a class of labor such as is described by Mr. Beveridge, and as must perpetually throw employees either upon charity or into the street; and having seen that this is a result of inherent and constant conditions of our industrial system, we are not surprised to find that statistics of unemployment indicate that it exists not only in periods of industrial depression, as is imagined by the New York Times and others, but is, on the contrary, a permanent feature. For example, the September Report of the New York Commissioner of Labor shows that the average percentage of unemployment during the prosperous period between 1902 and 1907, was 16.1 per cent. We shall see later when we endeavor to calculate the amount of our population affected by unemployment, that 16.1 per cent, being derived entirely from trade union reports, does not fully represent the whole, because it is generally admitted that unemployment prevails in much larger proportion in unorganized labor than in organized.[44] The last United States Census sets down the number of factory hands at over 7,000,000. Taking therefore the official figures as representing the minimum of constant unemployment, 16 per cent of 7,000,000 is 1,120,000, and as every factory hand has on an average four persons dependent upon him, this means a total population of 4,480,000, or roughly, four millions and a half permanently in want in the United States owing to this unemployment which orthodox economists recognize as a necessary result of the competitive system.
But the public takes no account of the fact that our industrial system regularly reduces a population of 4,500,000 to want. The public only takes account of the extraordinary unemployment which occasions disorder and riot in times of panic and industrial depression. Panics and industrial depressions must not be confounded. We have seen that industrial depressions are the inevitable result of what Mr. Beveridge calls "cyclical fluctuations" and recur with abominable regularity. Quite independent, however, of these regularly recurring industrial depressions due to the working of the competitive system, there are financial crises or panics due to similar perturbations in our money market. Although they differ in many respects from industrial depressions, nevertheless they have in common with them the inevitable result of producing unemployment on a large scale. The panic of 1907 began as a purely financial crisis, but promptly became a lengthy period of industrial depression. It is not necessary at this point to discuss the relation between these two. But it is important that mere scarcity of money in the panic of 1907 produced unemployment more suddenly and in larger proportions than any other panics that have preceded it.