UNEMPLOYMENT INSURUANCE

Hokitika Guardian, 7 December 1929, Page 3

UNEMPLOYMENT INSURUANCE

(% x.) 'fine Government fins apparently pledged itself to bring down some scheme of unemployment insurance next session. ]n the meantime the, views and opinions of various sections of the community are be jug obtained. As the matter is a very important one, it is to be Imped these opinions will be freely expressed and discussed. Jn a previous article 1 pointed out one or two aspects which 1 will again enumerate.

(I) Unemployment is.not an insurable risk—like fire, sickness, or accident.

(2) No scheme of insurance, would tend to minimize unemployment—rather to increase it.

(3) If work cannot be ifound for the unemployed, any monetary assistance, however justifiable on humanitarian grounds, must be regarded as a dole, no matter whether the fund is contributed to by the employer, the government, or a percentage,off the wage of those in work. "• U :

(4) That the “ tej claim a sustenance allowance without working for it would have aj bad moral effect and encourage the loafer, the waster, and- the less desirable 'classes of, the community. - . . *

(5) That the system' may easily become a very heavy tax on industry and on the people generally, as illusttated by figures quoted in Great Britain.

(fi) ( That the workers themselves arc by no means unanimous as to the beneficial effect of the scheme, as while no one is more liberal than the worker in relieving the distress of a co-worker, no one is more disinclined to contribute part of his wage to maintain in idleness the inefficient, the thriftless, and the lazy.

These may be taken as the preliminary aspects of the case but there are others which I will refer to and the in st of these is the unanimity of the leaders of organized labor—or labor unions—in urging unemployment insurance. The reason for this is the labor unions are gradually discovering that they are lighting against economic laws, and not against the “employers.” The position has in New Zealand been made sb plain that there can be no misapprehension. The constant demands b<r higher wages, and “ better conditions,” i.e. more money for less work, has caused many industries to shut down altogether—the work has gone out of the country.' In other cases factories are running with reduced staffs, and reduced turn-over. The secondary industries being no longer a safe and profitable investment, capital is being' withdrawn from them, and is accumulating in the banks. No investor is. foolish, enough' to put capital intohiii industry which will show a loss, or which, starting profitably, has'anything Imt an assured future as labor costs cannot be confidently assessed. Therefore the unions have numbers of unemployed oil their books, which is not only a tax on their finances, but is a direct challenge to the whole system of labor unionism, and the uneconomic wage system which itjlms set up. A labor unionist who cannon-get a job and the union cannot get one for him-r~ will sooner or later develop inWAVhat is known as the “kerbstone” employee and take what work he can get at what price lie can get, or will become a “free ” laborer and bargain with an employer on the basis of what he can earn. The hard economic fact that no labor union, conciliation council. arbitration court, or any other tribunal can keep a man or woman in employment when the wage claimed is in excess of the wage earned, cannot be ignored. But if, by the taxation of the public generally, and more particularly the employers, a fund can be provided for the maintenance of the unemployed then this difficulty which is facing labor unionists disappears. it is no longer a matter of vital importance whether inflation of wages beyond the economic level leads to unemployment or not—the > out-of-worTc members of the union are no longer a tax on the union funds. Therefore while the workers generally may 'he anything but favourable toward the unemployment insurance scheme, the leaders of “ organized ” labor, i.e., ti.i labor .unions, will, in their own interests make every endeavor to bring it about. While the issue, so far as labour unionism is concerned is clear—it is purely a matter of self-preservation—-theoretical economists are endeavouring to justify the scheme by asserting that the primary responsibility should be thrown upon each industry on the principle that every industry ought to maintain its own citizens out of its own products. In practice this would mean that anyone starting an industry would accept the responsibility of maintenance not only of the hands they employ but those they cannot find employment for—an abnormally impossible proposition. If a man elects to qualify as an employee in any industry it is absurd to say that lie thereby establishes a right to support by that industry. He acted in the first place oil bis own initiative and therefore had to take the risk as to whether the trade chosen was one which would in alter years provide him with n livcUhood. Many have found that they made a serious mistake in the original choice of o' pupation, and have had to turn to something else. That has been my personal experience as the trade to which I first “served my time” practically ceased to exist, and my indentures are kept by me merely as a curiosity and an interesting memento of one of my life’s experiences. The idea

that ]. had a claim on this trade 'because I had been unwise enough or unfortunate enough to' qualify in it is of course ridiculous. All iiurust/ries have quite enough to do to provide for those active engaged in them—in fact at present they cannot in some cases stand up to their present burdens. Therefore whatever the economist may say it is practically impossible to burden any individual industry with the responsibility of maintenance of those who are not employed in it—whether they are qualified for such employment or not.

The fact that in some cases a reserve of labor is essential applies almost entirely to waterside workers, general labourers, and a few of what is known as “seasonable” occupations—shearers, harvesters, fruit pickers etc. All permanent secondary industries, particularly manufacturers are not dependent on casual labor to any appreciable extent. They train their own employees for the most part and seldom have to fall hack on outside labor, which, when required can always be drawn from the ‘marginal” industries.

On humanitarian and economicgrounds something will undoubtedly have to be clone to provide maintenance for those willing to work, hut una.ae to obtain employment. 'The scheme should be known, however, as

•(employment assurance.” Work oi some-kind should be found for those who cannot find employment in their usual occupations, hut it has been, stressed: (1 j that any bill passed by the Government should contain the fundamental clause “no pay if no work”; (2) that a person should be classed as “unemployed” when lie could not obtain work at his registered vocation, but accepted work supplied to him; (3) that under no circumstances would the worker classed as “unemployed” (as above) be entitled to receive the same wage as in his ordinary occupation.

The intention of the above suggestions which have been approved by some of the leading business men and industrialists is that the Government should establish what would be virtually a clearing house for unemployed labour; that those registered as “unemployed” would in return for such work as they could do draw a maintenance wage until they could ho drafted out into employment for which they were more suited. The details in course will require careful consideration. It is doubtful whether some oi these “unemployed” will be able really to earn even the maintenance wage, and they will therefore to this extent lie a tax on the community. Whether a special fund would require, to be established to make up this loss, and what sections of the community would be called on to contribute to such fund is debatable. But while New Zealand may well consider how to provide work f r the unemployed it will he a had uay for the country when the “right” of the unemployed to monetary assistance is admitted. As a writer in a northern paper puts it under the heading “Work for All.” To preach the inevitability of unemployment- is a degrading and demoralising doctrine. Gnernployment insurance is at least two-thirds “dole” and at best a “palliative.” It only substitutes penury for starvation.