UNEMPLOYMENT PROBLEM

Manawatu Standard, Volume L, Issue 119, 16 April 1930, Page 2

UNEMPLOYMENT PROBLEM

COMMITTEE’S FINDINGS ANALYSED, SPECIAL REPORT SUBMITTED. TO CHAMBER OF COMMERCE. Recommendations dealing with the unemployment problem wero made in a special report to the monthly meeting of the Palmerston North Chamber of Commerce yesterday afternoon. It was . submitted by the sub-committee set up to analyse the report of the special committeo appointed by the Government to consider tho question of unemployment in New Zealand.

After giving very careful consideration to the matter, the sub-committee of the Chamber of Commerce decided to confine its comments to those dealing with the recommendations for minimising unemployment and providing relief for the worklcss, because, should the employment board as therein set out be constituted most of the other matters considered by tho committee would become matters for investigation and report by the unemployment board. The sub-committee of the chamber stated that it had been greatly assisted in its deliberations by an exhaustive analysis of the report made by Mr D. O. Williams, of Massey College, who had submitted a valuable commentary. “Stated briefly,” said the sub-committee, “the finding of the special committee is that a board should bo set up to deal with all matters pertaining to unemployment, r 1 such board to have control of funds raised by a special general scheme of taxation; the resources of the board to be employed in encouraging means of absorbing labour and providing relief works and sustenance payments where necessary under safeguards suggested in the report. The short findings of the sub-committee may bo summarised as follow: — “FUNDAMENTALLY-4pOUND.” “(1) That while there is ground for many points of disagreement with the details of the report as regards tho functions of the board, the method of taxation and tho question of pay upon relief works and sustenance payments generally, yet the report is the firßt constructive statesman-like proposal designed to grapple effectively with every aspect of this great national question, and is in its essential features so fundamentally sound that it merits the strongest support from the business community. ' , , “(2) Your sub-committeo is of the opinion that the creation of the unemployment board should have a very Important and far-reaching effect and is of the opinion that it should function wherever possible through existing departments of Stato and that it' should avoid tho establishment of another Government department with all its ramifications and expensive overhead; such activities for example as the establishment of labour exchanges throughout the country should bo ablo to be controlled through the Labour Department. “(3) Your committee finds itself in agreement with the main objects of the scheme which may bo stated briefly as follows: — (a) Tho planning and co-ordinating of all necessary public works so as to absorb labour when most necessary, (b) The creation by the proposed tax of a feeling of communal responsibility, (c) Tho provisions of suggested relief for willing and able unemployed. FUNCTIONS OF BOARD.

“(4) Your sub-committee considers the following points as worthy of further consideration. (a) Tho functions of the board as set out in the report require the most careful consideration and revision. The board should be charged with the duty of investigating and reporting to the Government upon all matters whether directly or indirectly affecting unemployment, e.g., tho question of tariffs or Customs duties as they affect any particular industry with a view to amending such tariffs or Customs duties so as to stimulate employment, in that particular industry. Tho board should have the fullest powers of investigation and report, and in this connection the right to co-opt any departmental head or expert for any particular investigation is a very valuable one. (b) The report provides that where the board is unable to find suitable work it’ shall bo ablo to make sustenance payments based upon a given scale and subject to given conditions. The main function of the board is to stimulate industries and so plan and co-ordinate public works that all available labour will be absorbed; failing this, the board has power to institute relief works and make sustenance pay' ments. Your sub-committee believes that in a young country liko New Zealand it should not be beyond the abilities of the board with the facilities, powers and rosources that it has at its disposal to find work of a useful and payable character for those needing relief. Your sub-committee, therefore, suggests that tho provisions as to sustenance payments should not be put into operation immediately. After tho board has been in operation for some little time, it should be able from its experience to give a very authoritative opinion upon the subject and if it found that sustenanco payments were absolutely necessary it could then report its findings to the Government. We believe that tho scheme would be more generally acceptable without sustenance payments, and that sustenance payments if a vital necessity would be hotter received provided the schemo had been first tried without them.

RELIEF works payments. “(c) Relief works'as far as the scheme is concerned must be distinguished from general works under the control of the board, such relief works being additional or emergency works necessary to provide relief for those who cannot bo absorbed in existing industries and tho general ■works of the board. Your sub-committee is of the opinion that on such relief works award rates of wages should not bo paid, co-operative contract and piece work should bo utilised wherever possible and where this is not feasible tho conditions of employment upon such relief works should be made so unattractive as not to induce men to leave other avenues of employment to take up relief work. (Note: The sub-committee has heard cases of men leaving permanent positions on farms and being taken on in unemployed relief works in Gisborne). SOME FURTHER ASPECTS.

“(4) Your sub-committee feels that a great opportuity exists for the board to plan a comprehensive scheme for providing back-block settlers with adequate road access by virtue of the resources that will be placed at the board’s disposal. “(5) One of the chief causes assigned by the special committee to the prevalence of unemployment is the seasonal nature of certain employments. Your sub-commit-toe believes, however, that in most industries of this nature the awards have been framed with this characteristic in mind, and the wages have been fixed correspondingly. high because of tho short period during which employment was available in that particular industry. If, therefore, under the activities of the board employment is made available all the year round for men engaged in such seasonal industries the awards in question will need to be revised.

“(6) Your sub-committee is of the opinion that one of the most urgent reforms required in our educational system is an immediate reduction in the size of school classes. WOre this carried out it would absorb many of the teaching profession who are at' the present time unemployed' and at the same time make the conditions of employment in that profession very much more attractive. “(7) It is suggested that one of the publio works that could bo undertaken by the board and one that would have the advantage of absorbing labour in any given locality, and where it was superabundant, would bo the establishment of a chain of suitable • landing grounds throughout the country; this . work would in the long run not be unproductive and would have the additional advantage of being able to be put in hand at any time. “(8) Your sub-committee is of the opinion that existing legislation _ under the Arbitration Act and industrial awards should bo so amended as to make payment by results the chief basis of remuneration of

labour, and that the principle of preference to unionists should be absolutely abolished. ADDITIONAL SOURCES OF REVENUE “(9) Your sub-committee is of the opinion that tb supplement the funds of the board “the following should, be considered, (a) An increase in tho amusement tax—an additional Id in each shilling is suggested to be hypothecated to the use of the board, (b) Chinese poll tax. —Either an increase in tho present poll tax or a tax on all moneys either, sent or taken out of New Zealand by Chineso i. “These are the unanimous findings of the sub-committee, with the exception of paragraph 8 dealing with tho Arbitration Act and industrial awards, from which Mr D. 0. Williams dissents.”

The personnel of the sub-committee was tho president of the chamber (Mr M. H. Oram), Messrs L. H. Collineon, W. G. Ross, A. F. Stuart and D. O. Williams (of Massey College). Owing to the comprehensive nature of the report, it was decided that it should not bo adopted immediately, but should bo circulated and left open for discussion at the next meeting of the chamber. The chamber decided to forward copies of the report to the Minister of Labour (Hon. W. A. Veitch), Department of Labour, Mr J.- Linklater, M.P., Mr J. A. Nash, M.P., the Associated Chambers of Commerce of New Zealand, the chambers in tho four chief centres of the Dominion, and to tho Press. AN ECONOMIST’S COMMENTARY. "A VALUABLE STUDY.”/ SUPPORT FOR PRINCIPLE. “It is apparent that tho report is only a partial survey of tho problem,” stated Mr D. 0. Williams, economist at Massey College, in submitting his analysis to the subcommittee of tho Chamber of Commerce. “The committee, howevey-, is fully aware of this and takes care to indicate some of the issues which further investigation should explore. Incomplete as it is, the report nevertheless is a valuable study and most of the suggestions made merit serious Consideration.”

Dealing wilth tho proposals for tho establishment of the board, Mr Williams expresses agreement with the reasons for its inauguration. Discussing the full scheme, which provides for the crcatipn of an cmplyoment and sustenance fund to be raised by a special individual employedment tax, he adds: “The most marked reactions have been provoked by this proposal. In many cases'the reaction has been one of undiluted prejudice. Often without reading the report, or without properly understanding it, peoplo havo vehemently declared against any proposal to introduco the ‘dole’ system into New Zealand. I, too, have no sympathy with any proposal which is equivalent to the introduction of a dole system; but I have an even greater objection to the indiscriminate, sometimes disingenuous, use of catch-words which serve 'only to pre-judge the issue. It is therefore as well to know what is meant by this word ‘dole.’ Originally it was used to mean ‘uncovenanted’ or ‘extended’ benefit which in England meant discretionary allowances in addition to tho allowances, 'which could bo claimed in respect of contributions paid under the unemployment insurance scheme. The allowances that could be claimed in respect of contributions paid were not doles. The sustenance allowances would be covenanted allowances and therefore not doles.

“I think it may as well be admitted that all unemployment schemes that involve out-of-work monetary allowances are to some extent dangerous. It is quite another matter whether the danger is great enough to worry about, and still another whether the customary explanations of the danger are valid ones. A familiar objection to allowances is tho allegation that those who are maintained without work are likely to bo demoralised. This word ‘demoralisation’ has a very high velocity of circulation at present; but for tho most part it is a humbugging word. It better to n,void this particularly wretched word ‘demoralisation’ and to approach the question by a different route.

“It must hot bo forgotten that it is proposed to provide sustenanco allowances only to those who are both ablo and willing to work. The schemo would obviously break down if adequate allowances were paid to those who were able but unwilling to work. Putting this consideration aside for tho moment, let us consider whether the provision of allowances under the proposed scheme is likely to diminish the desire of willing workers to obtain useful employment. It is-likely only , if the allowances are too generous, and if there is no adoquato test of willingness to work. It is unfortunately true that allowances on a sufficiently generous scale would undermine the will to work in some, perhaps many, cases. Therefore, it is essential that the scale of such allowances should bo well below tho ruling rato of wages for unskilled work, in order to make tho condition cf maintenance appreciably less attractive than the condition of employment. At the same time it is necessary to provide a test, wherever possible of tho willingness to'work. This can only be done by offering work when work is available. The proposals of the committee cover both these considerations. The suggested scale of allowances is not generous, and every unemployed worker must accept any ‘suitable’ work offered by tho board or else forfeit his claim for allowance. “Another objection to the scheme has been that the seasonal nature of employment may increase tho danger of allowances. It is a complaint against the impossibility of perfection. Another line of objection is that sustenance allowances aro likoly to undermine tho spirit of indepen-, dence. To a certain extent this objection is kin to the ‘demoralisation’ one. These heroic attitudes aro not tenable when it is realised that unemployment is a social phenomenon. Moroover, there is no taint of charity about the proposed _ 'allowances. More important is the possibility that allowances may lessen mobility and diminish tho incentive to industrial, redistribution. Under insurance schemes this is an admitted danger. But even 60 it is possible, says the Committee of Industry and Trade (final report) “by wise regulations and procedure to reduse this danger to a minimum.” Nevertheless a danger does exisT. “The general situation favours the development of competent exchanges, and this would mean that tho simulation of unemployment would be a particularly difficult task in our country. In my judgment tho chief danger of allowances is to be found not in the supposed ‘demoralisation’ of the recipients, but in the possible deleterious effect on the Government. . “Some check on Government inertia or complacence is to be hoped for under the present schemo. where every adult is frankly taxed to provide the funds for the allow--ances; for such a tax co-opts the democracy as a rough sort of vigilance committee with power to express itself in the ballot box. If the tax-payers fail in this respect, they tacitly agree with the policy and, therefore, cannot complain. If they are not to fail, however, they must be constantly reminded that allowances, though unfortunately necessary in the circumstances, are a poor substitute for useful work. In this view, I believe the great majority of working people will concur; for the great majority want neither pity nor charity, but useful work; and they want allowances (which are not charity) only when useful work is not available. This belief in the essential decency of the unemployed ana in their genuine desire to feel themselves more securely incorporated into the economic process is held by most employers. “I am in .complete agreement with the main reasons given in the report why the fund should be raised by general taxation. But the line of reasoning which justifies the imposition of a general tax would seem to justify also a tax graduated moro in conformity with existing graduations. With available machinery there is no reason why taxable incomes should not be assessed on a graduated scale. Tho levy is intended to bo a true tax, that is, a payment which is xincorrelated with benefits received, but which is to bo looked on as an incident of citizenship. That being so, its incidence of citizenship. That being by the principle of faculty, and that involves graduation. I conclude my statement by saying that it is my considered judgment that tho general principles expressed in the report call for support. I do so because the committee in its investigations has presented evidence which convincingly refutes, the suggestion that the unemployed have only themselves to blame; becauso it is a constructive proposal based on a highly realistic interpretation of the problem; and

because it offers a definite contribution to the solution of the problcrt. Its objectives are: the planning and co-ordinating of necessary public wroks, a fuller survey of the possibilities of extending productive enterprises, the development through an individual tax of a communal sense of responsibility, and relief for the unemployed. Tho success of a scheme with such comprehensive objectives must depend on the personnel of the board. Given the right men the board may become one of the most significant institutions in our country.”