Causes and Cures

Sun (Auckland), Volume I, Issue 180, 20 October 1927, Page 13

Causes and Cures

RFPORT ON UNEMPLOYMENT

INSURANCE CONSIDERED TTNEMPLOYMENT insurance should be investigated by the State to determine wether it was applicable to New Zealand conditions, stated an exhaustive report on unemployment prepared by Dr. E. P. Neale and Dr. H. Belshaw and Mr. W. H. Cocker, for the Research Committee of the Auckland branch of the Economic Society of Australia and New Zealand. It was presented at the meeting last evening. The report embarked on a comprehensive survey of present conditions and suggested some remedies that might be applied. One of the chief causes was the trade cycle, the depression in Britain effecting New Zealand through its primary exports. The position in New Zealand was due to the diminished purchasing power of the British consumers and through them that of the people with whom England traded. Another cause was the diminishing of industry through the decrease in the supply of raw materials as was the case in the timber and kauri gum industries. Further, the introduction of machine methods and electricity and all motive power was dispensing with men. This was noted in the agricultural pursuits where it was intensified by the farmers’ low incomes driving them to do work for themselves as far as possible. Another cause was the enforced inactivity of the men following seasonal occupations. Of the suggestion that unemployment was largely due to high wage rates produced by the arbitration system, sustaining wages above an economic level, the report said that it seemed clear that real wages were no higher than they were in 1914. They wera not unduly high and were not the cause of any substantial portion of unemployment. THE MORAL RESPONSIBILITY When it came to the suggestion of remedies the report remarked that under capitalism unemployment would never be wholy eradicated. Since then a surplus of labour was necessary to industry the moral responsibility was on employers to stabilise conditions when possible. The wages of the workers should be the first charge on industry. Every effort should be made to control booms and depressions to which New Zealand was particularly open. Control boards for primary products could be of undoubted value if administered in an enlightened manner. New Zealand had borrowed freely, and the spending of this money had created periods of artificial prosperity. Spending should be regulated to damp off the booms and reduce the depressions. CREDIT CONTROL Suggesting a measure of credit control the report acknowledged that it would be difficult in New Zealand as

there was no central authority such as the Bank of England to control banking. The manipulation of tariffs was not regarded favourably, as it directed the national wealth into less productive channels and might even increase unemployment. The report concluded by suggesting consideration of some sound system of unemployment insurance as the English scheme. In the succeeding discussion, Mr. A. G. Lunn, in the chair, strongly deprecated the introduction of unemployment insurance. Mr. A. A. Ross suggested that sufficient cause for the present unemployment was the numbers of people going off the land. Dr. Neale pointed out that the exodus from the country was most marked in a three-year period when unemployment was on the decrease. Further, that exodus was most marked in the three Southern Provinces of New Zealand.