UNEMPLOYMENT.

Press, Volume LXVI, Issue 19917, 2 May 1930, Page 10

UNEMPLOYMENT.

COMMITTEE'S REPORT CRITICISED. CHAMBER OP COMMERCE BULLETIN. The Bulletin issued by the Chamber of Commerce this month is a review and criticism of the report of the Committee on Unemployment set "P by the Government. Following is the text of tlw Bulletin:— The Committee on Unemployment deserves commendation for the effort ft has made to deal with a difficult problem- It cannot he claimed that the problem is solved; the report itself indicates much that remains to be done, and the machinery suggested, being untried, must be regarded as to some extent experimental. The report, however, breaks new ground, presents the results of much essential spadework, and makes definite suggestions that •will bo widely discussed. In this way it brings the problem to a point nearer solution. The report opens appropriately with a general review of tue conditions of 2sew Zealand industry and draws from this review certain general conclusions ■which deserve to be emphasised:— 1. Our principal business is the export of farm products. It is a profitable business and capable of steady expansion in volume, though prices tend to be lower in the future than in the last few years. 2. Itr follows that in primary production and incidental Industries we should engage the largest possible proportion of our population and our capital. 3. There will always bo ft proportion ©f the, population and of oapitaj which cannot be employed in primary production, but which can be usefully employed in other industries4. The costs in both primary production and other industries must be kept low enough to permit the expansion of our export trade. 5. Cost of local government and State services are just as much a, factor in our costs of primary production as the costs involved in privately-owned industries and should be aB carefully con* trolled;, 6. Changes in industrial method and other causes will lead to the unemployment of groups of workers from time to .time, and for their relief some provision* must be made. Threes points are emphasised in eonwith the relief of temporary unemployment j—l.'Any relief work; should bo useful and productive work, otherwise it is a waste;'of capital and labour. 2. Care is needed to avoid permanent relief work for inefficient labour. 3. Tbe cost of necessary relief work should' be spread as evenly as possible over the whole of the community. If it ia made a tax upon industry or sections; of industry it may have a boomerang* effect and increase rather' than diminish the problem. The report then passes on to a survey of statistics bearing upon unemployment. The table given below summarises the general position. Weekly averages of registered unom- ] ployed ana 'numbers employed on ' Publie Works, On On ,■; Unemployment Public Tear, i Register. Works, 1921 <9 months) 1,097 4,878 1922 1,387 8,878 1023 509 0,887 1924 437 0.494 1925 486 7,6 m , 1926' 1,196 0,675 1927 1,983 11,088 1928 . 2,804 " 11,628 192& v. 2,975 18,819 (to July) (to March) These figures suggest that unemployment is ntnob more.severe now than it was, during the post-war slump, that ItwajTßliffht from 1923 to 1925, and has grown steadily worse from 1926. " ,K«w Xn4w*Btar? . \-. . .The report makes suggestions for sweating new industries or encouraging young industries, in which there can be little certainty of profitable develop, meat Kew Zealand has, however, old, tried, and proved Industries, wool, meat, and dairy production, which are vital, as the reporMoneedes* to her economic welfare. Much more might be gained from tho expansion of such proved industries. The report , shows that I though their output has increased they are employing fewer men and occupying less land, and it is obvious enough that they aro not expanding because, under present conditions, they cannot, be-profitably expanded. For the month of February, 1930, the official index numbers, adjusted to a common 1914 base, ahow that wool prices are below 1914 levels, all exports prices average 20. per cent.'above that level; import prices are 35 per cent., wholesale prices 47''per eentl, retail prices 59 per cent., and wages, 35 per cent, above 1014 levels. Conditions somowhat similar have obtained for some years past. They are; surely pertinent, but the disparity in price levels and the causes of high and rigid, internal prises are not men* tiened in the report, The plain fact is that for many Industrial in New Zealand costs of production, in relation to the purchasing power of the community, aro so high that production cannot profitably be increased. If costs were lowered, markets might be expanded, production increased, and more employment would be available,. But eoats are kept high by high local body rates and national • taxation QQMeouent upon wasteful public expendi ure, by unnecessary regulation and J strleMon which limits fffoiSuctien and by uneconomic organ* sation of business which perpetuates ineffectual methods, Again the report shows that a large proportion of, the unemployed are elassed as labourers and comparatively few are skilled. Front this it may bo inferred more .training in skilled trades . might lessen , unemployment. The 1926 Qepsas Boport on occupations shows that, except amongst electricians and jockey*, there Is no trade in New Zealand averaging as much as one apprentice to every six males employed, These are some aspects that no com* Jlete investigation can afford to omit, 'or the general method ot dealing with unemployment■ must be to develop , every "prospect of reducing unemployment to the lowest possible minimum, and then to provide relief or sustenance for the irreducible minimum. Tho report has explored a considerable part of the field of enquiry; it has made definite suggestions both for expanding employment and for measures to improve upon-the present haphazard and uneconomic methods of providing and administering funds for unemployment relief. \ But there remains a significant patt of the fleld. of enquiry, ■where investigation might prove wore productive of results, .that has not been. fully explored. , It. is essential that thorough, practical'analysis shonH be made of the problem- in alt its aapeets, and it is to be hoped therefore that further enqniriy will fellow, Further figures from census reports ■examine the increased emjployment of females-during the past'thirty years. The proportion of females to males is less in 1926 than in either 1916 or 1921, and recent increases .in the proportion ot females employed in commerce have

been about balanced by decreases in the proportion of females employed in industry. It appears unlikely therefore that the employment of females, which has not increased relatively, can be responsible, in any .appreciable degree for the recent growth of ttaeuv ployment. Types and Cause* After examining the statistics, the report classifies the types of unemployment as follows J—1. Seasonal unemployment in the primary industries, butter and cheesemaking, shearing, moat.freesing, harvesting. 2. Unemployment in other Industrios because of the seasonal nature of the primary industries, as in transport and shipment of primary products. 3. Unemployment arising out °f the permanent replacement of manual labour by the use of improved methods and machinery, such as tractors, appliances for cargo working and road' waking, and in factories. 4. Unemployment arising from the substitution of new materials, such as oil for coal, electric power for steam, and brick, concrete, and steel for tinv ber in building. 5. Periodic general unemployment arising from general depression of trade, as occurred particularly in 192122, and again in 1926-27. 6. Unemployment arising from incapacity or improper'training. The detailed examination of these different types of unemployment leaves some doubt as to what is the precise subject of the committee's enquiry. New Zealand has always had, and is always likely to have, many industries subject to seasonal variations in employment. Similarly the mechanisation of industry, to which much attention is given, has been going on for many years, though it has probably been acoelerated by the necessity to meet lower prices since the war. The mechanisation of industry has, to a great extent, succeeded immigration in the popular view as the main cause of present unemployment. It eertainly occasions aome temporary displacement of labour, but the history of the Inst censury shows very plainly that It means in the long run more employment, not less, and higher standards of living at well, Both seasonal unemployment and temporary displacement due to mechanisation have been met in the past mainly by th« mobility of labour within the field of private employigsnt. The emphasis given to these causes of unemployment, together with the small measure of attention paid to the increase of unemployment since 1820, suggest that the committee has made little distinction between the causes of unemployment which are always operating In greater or less degree, and the causes which have increased unemployment so greatly during the last four years. The report is rather a report upon New Zealand unemployment in general. It was generally exnected that particular attention would be given to the recent exceptional growth of unemployment, The lack of this distinction between unemployment in general and present unemployment in particular is apparent throughout the report, and particularly in the remedies discussed. Suggested Bemedies. Sere the report makes a variety of suggestions. Afforestation, the expansion of the fur industry, and sand-dune reclamation arc ail well suited to -absorb labour seasonally unemployed, and all. might b« pursued vigorous? so ions a* tnev can he extended on sound business lines. The encouragement of home building for country workers Also appeals as boing desirable in itself, as its main object is to make country life more attractive, and so to cheek the tendency for too many workers to drift into town occupations, Considerable attention is also given to the possibilities of increased farm production. it is shown that the volume of output per person engaged on farms increased between. 1824 and 1928 by nearly 80 per cent. Formally it would be expected that such an increase would make farming more pro* Stable and lead to an increase in the numbers «ngagqd in farming. Actually the numbers so engaged decreased by 4J per cent,, and the process of Improvement was accompanied by an increase rather than a decrease of unemployment. The report does not state directly why a movement, which under ordinary circumstances should have been highly profitable, has not resulted in an expansion of land occupation and of farm employment. The fact is, of course, that circumstances were not ordinary, and that farmers faeed with falling prices for their products and being unable to reduce certain costs beyond their control, have .successfuly reduced other costs of production within their control, but the rewards of their efforts to secure more efficient production have been lost to them in the narrowing margin between falling world prices on the one band and high loeal production costs, heavy taxation, rates, etc, on the other. Had farmers been abia to secure for themselves; the rewards of their increased froduetiOß, farming would have atr&flted more labour and capital, the occupation at land would have increased rather than diminished, and there might have been no serious unemployment problem to solve. It is suggested that pig and poultry farming should be expanded, New Zealand appears eminently suited for both types. But a recent full report by the Farm Economist of the Agricultural Department concludes that poultry products eannot bo profitably produced for export at the present time. There has also been much recent discussion ,0f the pork industry, and opinions are divided at t© Whether production for export can be carried on profitably. Pig raising is carried on in many countries as an adjunct to the dairyng industry, and A Went New Zealand Government report demonstrates that our present feed RUf plies are sufficient for treble the existing number of pigs, yet our pork production remains comparatively small. At the present time it appears that the margin of profits anticipated In pig farming is insufficient, to attract labour and capital into thp industry, and that, unless prices rise, 00»ts of production must be lowered before any considerable expansion oan ocaur.

Ao Employment Board. Most attention, however, is being given to I 'that part of the second section of the report which recommends the establishment of a permanent Employment Board, and to the methods proposed for financing the Board. In framing thejO recommendations the com mitt of has "endeavoured, to provide machinery which will primarily assist to: enlarge, the field of economic employment in productive industry and by which temporary relief may bo provided for the unemployed until such time as that enlargement is secured." The committee considers that the essential features of a satisfactory scheme for unemployment relief arej 1. The provision of employment betwe'en seasons for those workers who »re regularly employed in seasonal work connected, with primary indus. tries. • ■ 2. The provision of employment for those workers who are displaced by c hangea of industrial method*, taorea* ed n»# of tabow saving machinery, and changes in demand for commodities. 3. The provision of sustenance pay« ments for unemployed workers willing to work and aapabb of working during

periods when employment cannot be found for them. The method of unemployment insurance is rejected as inapplicable. No data exist sufficient to afford a basis for an actuarially sound scheme; a tax on industry might be involved that struggling industries could not meet; labour is extremely mobile and much employment is seasonal; and no insurance scheme could do more than provide sustenance payments. All this is true; generally it may be said that unemployment is a serious problem in New Zealand only in industries to Which no sound scheme of unemployment insurance could be applied. The suggested Employment Board is to undertake a wide variety of functions. It has -to act as a sort of Economic Advisory Committee to the Government, as a Development Commission, and is to supervise labour bureaux, provide relief work, and administer the sustenance fund as well. Such a Board should be kept as free as possible from political influences, but, even so, it is open to very serious doubt whether all these functions could be efficiently discharged by the one body. British experience for instance has shown that in that country the localisation of administration is an almost essential feature of sustenance payments from the insurance fund. Moreover the Board is to "represent" employers, employees, and the Government. Such a Board should certainly consider the interests, and perhaps the views of these three parties; it should however be composed, not of representatives of particular interests, but of men selected solely for their superior fitness for the task to bo undertaken. Provision of Funds. The committee agrees that the finance required for the work of the Board should not be collected from industry alone, but that all sections of the community should contribute, and so share the cost and the responsibility of providing for unemployment. It ( suggests, therefore, that a special individual employment tax should be levied on all persons, with certain exceptions, above seventeen years of age. The scales suggested are estimated to yield about & 500,000, An additional £BOO,OOO is to be collected from a flat income tax of Id in the pound, extra i land taxes, and a levy on local body rates. Then the Consolidated Fund is to be called upon for about £300,000 (one-thlrd of the total) to make up an amount of about £1,000,000. Emphasis is laid oh the necessity for careful and economic administration of this fund, and it is hoped that in good years funds should be accumulated against calls to be made in times of periodic depression and unemployment. The report urges that on no account should the Consolidated Fund of the Dominion be callel upon for more than one-third of the Board's funds. Apparently it «»■ been realised that increased taxation may create as much unemployment as it relieves and cure none. At the present time any increases in taxation, particularly in land taxes and rates, appear most undesirable. But the whole procedure recommended requires careful examination. The Board's functions include the further investigation of unemployment, ard of means for increasing employment, and many critics will claim that this investigation should be made before the Government commits itself to the drastic innovations suggested. < ! Since it is Btressed that employees, owing to the conditions in New Zealand, cannot contribute to unemployment insurance, and that they should contribute directly a large part of the iunds of the Employment Board, the success of this recommendation must turn largely on the practicability of th recommendations for the special employment and Individual taxes. There are grave doubts whether these recommendations are administratively practicable, The elaborate and irksome machinery indicated as necessary for the collection of these taxes suggests that they may prove impracticable. Should this be the case, the essential principle of the unemployment fund, that the burden of contribution shall be shared by all, could not be maintained, and the whole scheme would call for review, - \ General approval will, however, probably ba given to the principle enunciated, that relief work Is better than sustenance, and should be provided only temporarily and on sound economic lines, and that where relief work is not available sustenance payments should be provided on a scale no higher than the benefits furnished by a scheme of Unemployment insurance. Further, it is undoubtedly , right that these pay. ments should be as far as possible the return of funds contributed by those who run the risk of unemployment. Conclusion. Summed up, the committee has col--1 ted and published in the report a considerable amount of data bearing upon the problem of unemployment, it has surveyed the field of industry and has made certain positive suggestions for the expansion of our employment capacity and for relief and sustenance. It has, however, neither completed the enquiry nor reached a final solntjon. The report itself outlines a number of topie* requiring further investigation, and these are left to be dealt with by the Employment Board. In addition there are certain important aspects of the question that have hardly been touched upon, perhaps because the members of the committee, holding widely divergent views on these aspects, and desiring** unanimous report, found agreement impossible, .. T «f» critical reader it might appear that the report looks overmuch to more taxation and to more State machinery both to expand employment/ and to provide relief. This attitude neglects she obvious faet that such taxation inyolves a transfer of spending power from the taxpayers to the State, and may decrease the taxpayers' power to employ labour as much as it Increases that of the State. Moreover, the efforts of public authorities to deal with unen,pioyment in retfeut years have not been encouraging. Despite considerable improvement in trade and prices in 1028 And JOBO, public expenditure in relief increased from & 256,000 in J02627 to £915,000 in 1938-29 and unemployment appears to have increased rather than decreased, The report does ■ not explain why unemployment has apparently increased during a period when trade conditions were improving.

AUCKLAND DEMONSTRATION. (TUBS! ASBOCHI7OH TBI<BOHAM,) AUCKLAND, May 1. When a deputation of 200 unemployed made a noisy demonstration at the Town Hall to-day, demanding that the 'whole of them should bo heard, and not merely their executive, fcho police cleared the corridor at the refluent pf the Mayor, Mr George Baildon. Shouting? "We want work!" "We want the Mayor 1" and "Give us a hearing!" the crowd of men made a considerable din in the corridor, but it was noticeable that a handful were doing most of the shouting. FIFTY MEN TO BE PLACED. (PBBS3 ASSOCIATION TKLBOBAW-) WELLINGTON, May 1. When a deputation representing the unemployed, who met yesterday, pre* »antad a number of requests to the Hon. H. Aiinort, the senior Minister in Wellington, to-day, he gave an undertaking that fifty men would ba placed immediately on road works in the Wairarapa district.