“IMPOSSIBLE” LEVEL OF UNEMPLOYMENT ACHIEVED

Press, Volume XCIII, Issue 27894, 16 February 1956, Page 12

“IMPOSSIBLE” LEVEL OF UNEMPLOYMENT ACHIEVED

LABOUR SHORTAGE IN BRITAIN—I

[By RICHARD DENMAN of the “Economist”] [From the “Economist” Intelligence Unit]

LONDON.—For the last two years, Britain has been achieving the impossible. Unemployment has averaged between 1 per cent, and 1J per cent, of the working population. Until a short time ago, it was universally assumed that the lowest level to which unemployment could be reduced in peacetime was about 3 per cent, of the working population, allowing for unemployables and for people changing jobs. This would mean rather more than 600,000 people out of work. Bui the actual number unemployed in November for example, was in fact only 202.000. With unemployment as low as this, industry is clearly scraping the very bottom of the barrel for more workers. For every man or woman registered as unemployed, there are two or more vacant jobs. And even this understates the position, because many employers have simply given up reporting vacancies to the labour exchanges. Until recently, the country has coped with its manpower shortage with remarkably little friction. But as the pressure grows stronger and stronger, more and more industries are finding it increasingly difficult to keep going without more workers. Labour shortages are being reported in an enormous range of occupations, from the higher levels of the Civil Service to bakers’ roundsmen. There are only a handful of occupations—medicine, the stage, and journalism are perhaps the three outstanding ones —which can be considered more than adequately staffed at present. Some jobs, such as domestic service, have become more or less extinct except for part-timers and foreigners brought in on special work permits (17,000 came in last year). Others, like the railways, which were thought to be. if anything, overstaffed at the beginning of the year, are now’ crying out for more workers. “Poaching” of Workers One product of the labour shortages has been to create a “black market” in workers —especially in skilled workers. An employer will try to “poach" workers away from his competitors by offering wages far above the nation-ally-agreed rate, and often by offering special facilities —a house, perhaps, or unlimited opportunities for earning overtime whether the work is there or not. bonuses, incentive payments, and so on. This practice is most common in engineering and building, and it is especially prevalent in the Midlands. Today less than one engineering worker in 20 is on the basic minimum wage negotiated by his union with the employers’ federation; and in building the ratio is not much higher. Neither employers nor trade unions like this state of affairs, but both are powerless to alter it. The employers do not like it because it pushes up costs and will lead, they think, to a floating, unstable labour force always moving from job to job. The British Employers’ Confederation has appealed to its members to desist from the practice, and this plea has been echoed by the Federation of Building Emnloyers. The engineering unions tried earlier this summer to persuade their members voluntarily to reduce overtime, but without success. They do not like the system because it

weakens workers’ loyalty to their union and tends to make nonsenses the whole laborious procedure n» negotiating basic wage rates J national level. They find that work®, who have got used to earning high pat packets and working long hours less willing to come out on strike "go slow” in support of a uni® grievance. Flight From the Farms

Craftsmen are very scare, both fo engineering and building. But elsewhere the effects of the labour short, age are more serious. Farm workeri for example, are leaving the land at the rate of 18.000 a year, and the agricultural labour force has dropped by 15 per cent, in the last six yeart. Already there are more machines than men on British farms. Coal, miners, despite their high earninn are leaving the pits at the rate of 5500 a year to take up more congenial jobs in industry. The Coal Board reckons that it needs a further 17 OQn miners immediately, if the present rate of £80.000.000 a year of coal i®. ports is to be reduced. Curiously enough, it is often the occupations which were most soughtafter before the war which are now losing the most workers. Example are the railways, the police force, the Post Office, banking, and insurance During the depressed pre-war vears these were popular jobs because they gave security of tenure, although thev were not particularly well-paid. But who cares for security of tenure now when jobs can be picked up for the asking? Besides, for many types of railwaymen, as for postmen and policemen. working hours are often inconvenient and irregular. The Police Federation claims that one-third of the police forces in England and Wales are now at least 10 per- cent under strength. In Birmingham, says the Union of Post Office Workers, there are only 1419 permanent and 239 temporary postmen to fill 2025 vacancies. Where unions claim labour shortages, there is, of course, always an element of special pleading, but these figures have not been seriously challenged by the employers. - Bus Services Curtailed The other chief victims of labour shortage are bus services and delivery services. Again, one of the main reasons is that hours are lona and inconvenient. Because of staff shortages, a number of bus services, as well as a number of goods train services, have had to be curtailed. London needs another 3500 busmen urgently. Both Birmingham and Wolverhampton nay their busmen considerably more than they are supposed to under the national agreements as the only way of keeping their bus services going. Sheffield has had to resort to hiring privately-owned buses.

Coal deliveries are likely to be particularly slow this winter because merchants are hard-pressed .for labour. Only the other day an Oxford firm with 4000 customers had to close down for lack of workers. And there is a growing and serious shortage of milk and bakerv roundsmen, as well as of inside staff for bread production. These are just some of the man* power problems created by the boom in production. In a second article I will try to show how they can be met