The Government and Unemployment

Press, Volume LXXIV, Issue 22336, 25 February 1938, Page 12

The Government and Unemployment

In his address at Sydenham, a few days ago, the Minister for Labour, Mr H. T. Armstrong, repeated the Government’s claims to have reduced unemployment to figures, “ the lowest “ in the history of New Zealand or in the world “ to-day.” Such comparative boasts are useless, except as platform rhetoric, unless their statistical basis is established. For example, when Mr Armstrong says that the 1897 census showed 14,759 men and 2373 women out of employment —“ double the number to-day ” —he seems to be setting up a comparison between those figures and a present total from which are excluded unfit men, men whose employment is conditional on subsidy payments from the fund, and men engaged on a public works programme expanded as a temporary relief measure. When Mr Armstrong shows that the 1897 census figure excluded unfit men and women, he will still be rash to claim that to-day’s figure is only half as large; but he will not be quite so impudent in his rashness. But these comparisons are worth very little at best. What concerns the country is the nature of the measures which the Government has devised and put into effect. Now it is quite true, as Mr Armstrong says, that great numbers of additional employees have been absorbed by trade and industry in the last two years. The public, however, does not share the Government’s selfflattering opinion that its industrial and other legislation has been the cause of that: it inclines to the theory, and rightly so. that the expansion was made possible by the. recovery of prices and profit-margins in the export industries, and that this same recovery enabled

trade and industry, at the same time, to stand the weight, in costs, of the Government’s legislation. But when Mr Armstrong went on to boast that there is not one manufacturer who is not better off to-day, he was unkind. He pushed his colleague, the Minister for Industries and Commerce, a little deeper into the trouble he is having with manufacturers half desperate about their business. Dismiss this false claim to have stimulated employment by bringing about industrial and trade recovery, and there is little else that the Government can urge on its own behalf, beyond swelling the total of State employees, Mr Armstrong put the increase at 18,000, about half of which is accounted for by doubling the public works staff. But the Minister for Public Works himself has said that to deal with unemployment by expanding public works could only be a provisional policy, and that a permanent solution must find places for the men in industry. Nine thousand, or 10,000, of Mr Armstrong’s'’alleged reduction in the total of unemployed men are, virtually, supernumeraries on the public works roll. How securely and wisely they have been placed there will best appear when, for financial and other reasons, the public works programme must be cut down. As for the other half of his 18,000 additional State employees, Mr Armstrong will not satisfy many taxpayers with the loose explanation that “ the improvement in national income “ warranted an expansion of State activities.” Mr Armstrong might take the pains to turn that round: “ a reduction in national income “ warrants a reduction of State activities.” If he does not like that—and he and his colleagues furiously protested against it—then to justify crowding the State departments with new employees he must look further than an improvement in the national income. The Government has been magnificently helped through its employment difficulty by forces beyond its control. Its own effort is almost completely accounted for when public works, State service in other departments, and relief works subsidised by the State are mentioned. The cost of this effort is huge; its permanent value is slight.