Labour policy—false and true

by Lynden Livingston Macassey

CHAPTER XXIV
THE RIGHT RELATIONSHIP BETWEEN EMPLOYERS AND EMPLOYED
1. CONTENTMENT IN INDUSTRY (a)

Provision against Unemployment—Equalization of Demand for Labour—Insurance against Unemployment—Need of a Job-Finding Organization—Insurance by State or Industry—State Insurance—Insurance by Industry or Industries—Reform of Present Out-Door Relief System—Unemployment Insurance by Firms.

Reform of the relationship in industry between employers and employed involves three things: securing contentment, achieving co-operation, increasing production; these constitute the dynamic trinity. Only when contentment can be secured is co-operation made possible; without co-operation there never can be efficient production; production alone can create the prosperity which is the sole source of the financial ability of any industry to pay high wages and maintain good conditions of employment. Contentment does not mean stagnation; it means willingness to progress under an accepted system—in other words, evolution.

(a) Provision against Unemployment

If we are to secure contentment in industry, unquestionably the first matter to be dealt with is unemployment. A distinction must be drawn between normal unemployment—the result of seasonal or cyclic depressions in trade, which arise from circumstances well-known in industry, either affecting the world at large or peculiar to some country in particular, or special to some national industry—and the abnormal unemployment which has resulted from the Great War. We are now considering normal unemployment. What Government should do to deal with the abnormal unemployment occasioned by the war we have already discussed in Chapter XXII.

Equalization of Demand for Labour

In regard to normal unemployment there are two things only which can be done:—first, to reduce, so far as possible, fluctuations in the demand for labour between one year and another, and one season of the year with another season of the same year, and, secondly, to make the best provision economically practicable for the maintenance during times of trade depression of persons who are unemployed or under-employed. It is most difficult to “equalize the demand for labour.” In ordinary commercial business that is a matter largely outside the power of Government, employers, or Trade Unions. It is one of the privileges which is reserved for the consumer. The only directions in which fruitful action can be taken are to provide a system such as exists under the Labour Exchange organization, or that of certain Trade Unions, whereby the workman out of a job can be put in touch with the employer who wants labour of his particular description, and to arrange the execution of public works by Government Departments or local authorities, and the manufacture of stores or equipment for public purposes, the amount of which is more or less standard, so that by postponing some and expediting others some advance is possible towards making more uniform the demand for labour as between good times and bad. But the limits within which this is a practicable policy are much narrower than is generally realized, and immensely more restricted than is suggested by the Labour Party.

Insurance against Unemployment

Although to prevent unemployment is impossible, happily a great deal can be done to mitigate the evils of unemployment when it does occur. Under no system of organizing industry—in spite of the contentions of the Labour Party that under its socialistic reconstruction of industry there would be no unemployment—can any person be guaranteed continuous work. It is possible, however, to spread the income of the industry in good times over bad times, so that when the latter supervene there will be something coming in to the worker for him to live on. This is not a dole as some people call it, but rather in the nature of deferred pay. With that in operation there would be an end to what is called by Labour the “wages system.” The worker would no longer be paid wages for such time only as he is employed, but would receive pay for the time he works and also pay during the time he is unable to work because of trade depression. There must be in all industries, both on the side of labour and of the employer, a reserve of productive capacity to meet the peak demands, and all employers with few exceptions recognize that it is their duty to apply some of the profits of good times for the maintenance of this reserve of labour in their industry when unemployed at times other than peak times, and of the general body of labour when unemployed or under-employed at times of trade depression. But the provision against unemployment must be a joint fund to which both the employer and the worker contribute during good times.