UNEMPLOYMENT

Rotorua Morning Post, Volume 2, Issue 226, 18 May 1932, Page 7

UNEMPLOYMENT

NECESSARY EVIL. NEW YIEW OF PROBLEM AND SUGGESTIONS FOR CURE. ETHTCAL NOT ECONOMIC. Unemplqyment is at bottom not an economic but p moral problem. It js an outstanding example of fhe reqson why ethics must be considered ip economic discussion. It is, of course, an incident of our 'economic system, but what is not generally recognised is that it is a necessary incident, writes Lawrence Rogers, M.A., in the Outlook. So ,long as our system of employment is based solely on the principle of supply and demand, so long will we i have the unemployment problem with j us. From the purely economic point of view, indeed, unemployment is wholly justifiable It is essential for the efficient working of our present system that there should be a reserve of labour on which employers can call in peak periods to satisfy the demands of those periods . If men were machines this argument might be justified on all grounds; but paen are not machines — they are husbands and fathers whose needs grow no less because they are held in reserve as part of the economic machinery. If then it is necessary for the maintence of economic welfare that a certain amount of labour should be kept in reserve it is jus£ and right that industry or the community should make provision for that reserve of labour in the period in which it is lying in reserve. Permanent Problem. The weakness in practically all discussions and proposed solutions of the problem is th3.t it is treated as a temporary problem which occurs only in times of bad depression. But the problem is not a temporary one, it is permanent. In New Zealand, for example, statistics compil'sd by the Govepnment Statistician show that from 1892, when statistics were first available, there has not been a single year without an unemployment problem The figures given, as the Statistician says, "do not show the full volume of unemployment,5' but they are sufficiently accurate to prove my point . The lowest figures on record are for 1897, when 1718 unemployed men were assisted, and the average number of unemployed men over the past' 40 years is reeorded as 7500 per year. Now, it is clear that, despite this evidence, all the measures for the solution of the problem proposed by our Parliament have treated the problem as a temporary one, and as such are mere palliatives which do not touch the heart of the matter. There can be no true solution until unemployment is recognised to be a perf-\ manent and necessary incident of our economic system as at present organised. Really Three Problems. There are really three problems hidden behind the term unemployment. In the first instance there is the problem of the unemployabl'e, who through sickness or general physical or mental unfitness are unable to worlc. There is a certain amount of provision made for the eare of this group in asylums, hospitals, and sanatoria, 'ete. The second group is composed of those who have "seasonal" occupations, and who are put of work for a considerable portion of each year. The fact that most seasonal occupations provide a fairly high wage level helps to sustain this group. The third and most important group are those who have periods of unemployment because they form the "reserve of labour.5' This last group fiuctuates greatly in size according to the position of the trade cycle, and it provides the biggest community problem. Bad Government. As far as New Zealand is concerned the chief cause of the unemployment of the latter group is not so mufh international trade fluqtuations as bad government. It would be interesting to discover how much of our present unemployment is caused by the action of the Government in dismissing large numbers of employees, especially from the Public Works l)epartment. With wise action on their part the present depression would not have hit New Zealand with anyr.uiig like the force it has. The present financial stress is duc not merely to international trade fluctuations, although that may be the primary cause, but to a thoughtless and prodigal borrowing policy during times of prosperity. The time for the Government to borrow money for public works is not i'n times of prosperity, but in times of depression, when there is need to make provision for the large unemployed "reserve of labour.55 Two Bad Things. By borrowing in prosperous days the Government does two bad things — on the one hand it exhausts its ability to borrow, and on the other hand it creates a fictitious demand for labour. This is not the first time in the history of New Zealand that a prodigal borrowing has caused and created a false demand for labour, and by its sudden cessation, an unemployment problem. In 1890 the prices of New Zealand produce began to fall, and a similar depression to what we now have visited our shores. The 'Government then as now had been pursuing a large borrowing policy, and coincidental with the fall in prices abroad suddenly ceased borrowing, thus accentuating the depression and its concomitant the unemployment problem. Socialism Not the Cure. Being aware of the existence and the causes of a problem is not the same thing as finding some cure for it. There does not seem to be any possibility of curing the disease unless there is some profound change in our economic system. Just how any such 'change can be made is perhaps difficult to see. The Socialist declares that be has the secret, but has made no detailed explanation of how in a Socialist state he can avoid the implications of supply and demand. It may be true that in a socialistic state unemployn^ent cannot exist, but I think that the Socialist as well as the upholder pf the present system would have his difficulties. At any rate,

whatever the future may hold, we have not yet a socialistic state, and *it is necessary for us to find, if we can, some solution of the problem under the conditions of our present system. Prepare in Good Times. It can be laid down at once as one way out that every industry that requires a reserve of labour to be always at hand should make provision in times of prosperity, when the demand is high, for the employment of its staff when the demand is below normal. As things are now, every sound business lays aside from its profits in good times reserves to protect the capital of the industry in bad times. .If it is right thus to protect the shareholder, the contributor of capital, is it not also just that'in good times the industry should set aside reserves to assist the worker, the contributor of service, in bad times ? The difficult thing here is to persuade the capital shareholder that the contributor of service is just as necessary to the welfare of the industry as the contributor of capital. It is surely a Christian axiom that men are greater than things. If it is so, then should we not make an endeavour to carry out the principle in the organisation of industry? Is it not justice to ask that the safeguards at present extended to the contributors of capital should also be given to the contributors of service? Duty of Industry. If then, industry assumed its 4he Share of responsibility for the maintenanee of its reserves of labour, and a wise government recognised it as part of its bounded duty to prepare in days of prosperity for the day of adversity, the unemployment problem would lose its dread significance. Price fluctuations abroad would still affect our living, but the extremes we now experience would be greatly tempered to the mass of the people. Both primary and secondary industries require to learn the lesson that it is bad business for them to have to fape such an unemployment problem as we now have, while we all need to realise that it is unethical and therefore un-Christian to place tens of thousands of our fellow-men and women in this small country so perilously near to starvation and mental and physical agony.