WORK FOR UNEMPLOYED

Otago Daily Times, Issue 22628, 20 July 1935, Page 8

WORK FOR UNEMPLOYED

THE POSITION TO-DAY SURVEY OF PAST FIVE YEARS NATIONAL SOCIAL RESPONSE ' BIUTY REVOLUTIONARY CHANGES NEEDED In the course of an Interesting address to the Dannevirke Rotary Club yesterday the deputy chairman of the Unemployment Board (Mr W. Bromley) outlined the position with respect to the problem of unemployment as it appeared to-day compared with the situation in 1929. “Less than 10 years ago/' said Mr Bromley, “the approved social policy of New Zealand touching unemployment was that every man who lost his employment must rely mainly on his own resources to get another position and to keep himself and his family alive in the meantime. Labour exchanges, operating as clearing houses for employment, were provided by the Government, but, apart from recruiting labour for public works carried on by the Government, they were not very effective, To-day, almost five years have passed since the introduction of legislation which accepts unemployment as a national social responsibility; and, by way of contrast, the question whether the present legislative machinery is adequate to deal satisfactorily with the problem of unemployment in New Zealand is indeed a burning one. If a plebiscite were to be taken on that question, inviting a yqs or no answer, the result might easily be a unanimous no. It is very unfortunate. however, , that the employment position would be in no wise improved as a result of this unanimous declaration of disapproval,. It is even more unfortunate that so many of our responsible citizens still mistake a resolution of disapproval of measures taken to relieve unemployment,for a contribution towards a solution of the problem. Unemployment today is regarded as the greatest of our problems. If the legislation as it is written is in any way falling short ol expectation;, if you feel like condemning it because it does not provide for longrange planning, try and remember the atmosphere in which it was born. ‘The legislation must be regarded as temporary only.' ‘No new department must be created.' ‘Administration costs must as far as possible be avoided.’ These and many similar phrases were prominent in the debates and were widely applauded in the _ country. There was not that directness. that confidence, and that determination which characterised the introduction of the Reserve Bank ( the Mortgage Corporation, or the Executive Dairy Commission. Any ( known weaknesses notwithstanding, the present legislation as a measure designed to deal with the relief of distress arising from seasonal and short-term employment has met the emergency arising from the depression over a wide field with results comparing mone than favourably with any other known administration. The measure of relief/granted, admitted to be totally inadequate in itself to meet all the requirements of the recipients, is on a higher basis than that of any other known unemployment relief administration. No increase in the national indebtedness has been involved; administration costs have been extremely low; and the national expenditure has to a great extent been recovered by the creation of national and public body assets. COMPARISON WITH 1929 “ The problem of unemployment in New Zealand to-day differs widely from the problem as it was understood in 1929. From an. unemployment problem that was largely seasonal, the position has changed to a problem of chronic large-scale unemployment. During the same period, and associated with the problem ot unemployment, as a country we have emerged from a position as exporters privileged to. work on the easy assumption that England offered a bottomless market for our produce at profitable prices to a. position where our export market is being restricted by quotas and where export prices barely meet production costs. Dependent to the extent we are on the value of our exportable products, the single factor of a sharp drop in export prices would have had a tremendous adverse effect on our general employment position. The difficulty has been greatly accentuated, however, by the introduction of machinery to displace labour. As instance, despite the depressed state of our dairying industry, milking machine plants to take the place of labour on the farm are being installed at the rate of over 1000 plants per annum. Nor has this practice of introducing machinery to displace labour been confined to oiir farming industry; it is as, much in evidence in our factories, in our workshops, and op our waterfront.

“ Whilst this policy of rationalisation goes merrily no. we have, as at the end of last month. 53,241 adult males wholly or partially dependent upon the Unemployment Fund. This group, during the past four years, has fluctuated between the minimum of 44,000 and the maximum of 75,246. The men wholly dependent upon the hoard’s intermittent work scheme, known as scheme 5. or on sustenance payments—that is, men without any definite contract of employment—have fluctuated between the minimum of 31,884 and the maximum of 45,749. Let me at this stage direct your attention to this fact: the farmer or the industrialist called upon to make a decision on the question of introducing or not introducing a machine on his farm or in his business to take the place of man-labour has no accepted responsibility for the welfare of the worker who is displaced, apart from paying his tax like other persons; also the Sfate, now called upon to accept the responsibility for the welfare of the displaced man, has no say whatever in the question of whether the man’s job shall be given over to the machine. This, then, is the picture of the problem to-day; 53,241 of our male adults are either without employment or employed as a condition of assistance given to the industry from the Unemployment Fund, and 36,305 are without contract of employment because industry cannot employ them profitably. This number could be reduced to some unknown extent if we made a new definition of those unemployed and excluded all those who, through physical or mental infirmity, are unable to qualify as being able and willing to work; but for the purpose of this talk the numbers I have given may be considered accurate. LEGISLATIVE MACHINERY “To decide whether the legislative machinery is adequate to deal with this problem depends on the results desired. A city newspaper recently concluded a leading article thus: ‘The Unemployment Board has been in operation for four years now and so far it has failed to provide full-time standard employment for all the unemployed.’ If the result desired is that apparently anticipated by this editor, then the legislation is certainly not adequate. Having regard to the limitations placed upon the board by the legislation, and for the accepted policy that the field of industry should be left to private enterprise, a correct conclusion to the article might have been that, notwithstanding the liberal subsidies provided from the Unemployment Fund for the encouragement of industrial development, private enterprise still fails to organise employment for thousands of our workless. Nor is it enough blandly to pass resolutions calling upon the State to organise major public works. What major public works are thought of? What are to be the conditions of employment on these public works? Are they to be financed from revenue or from loan moneys? If from loan money, must the job be one that will produce additional new revenue sufficient to meet interest and sinking fund? Would the creation of public works at present help our unemployment problem in the cities, or would'it create a new employment problem in the country? That last question is prompted by past experience. During the whole of last summer there were over 150 jobs without workers in Central Otago. As the board was finding some of the cost, the jobs were reserved at the request

of the board for unemployed city workers. You can surely remember some of the trouble. It was alleged that to send men from the cities was breaking up the homes, and the strongest support on all sides was given to the men who refused to accept the work when offered. Whilst this was taking place, scores of applications were received from country workers offering to man the jobs. When the summer was drawing to a close, the absolute preference for city workers was withdrawn, and the jobs were filled immediately. Since then we have heard no complaints from the Public Works, but farmers are complaining that labour cannot be obtained for the essential work of the farm. Recently a reporter produced for my comments a whole column of advertisements offering employment as farm hands. In so far as wages were stated, none offered as much as is given to a married man with two or more children on Scheme 5 in the cities. When thinking in terms of public works which must be in the country in relationship to our city unemployed, the wider vision should be applied. LEGACIES OF THE DEPRESSION “ There are many legacies of this depression in the form of industrial problems that have not as yet been realised by the man in the street. Take this one: How many of you will have realised that as a result of the recent improved activity in industry, we have to-day the spectacle of overtime being worked because skilled labour is not available, and that in spite of the large numbers of unemployed, This position is not perhaps at its worst as yet. Let me illustrate this point further. An award governing tradesmen provides that an employer may have only on? apprentice to each journeyman employed. Under this award a firm prior to the depression regularly employed 40 apprentices, say eight in the first year of apprenticeship, and eight with 3,3, 4 and 5 years’ experience respectively. Then came the slump involving the dismissal of journeymen and precluding the possibility of engaging any further apprentices until the number of journeymen were increased. The depression has lasted four whole years, working out the apprentices, and tq-day in many of our workshops you have apprentices in their fifth year of indenture and the next apprentice is the one just engaged and in his first year. The board has already in one or two cases provided subsidies for the training of adults, but this can only be done in certain industries not governed by awards. We have also provided subsidies for short periods where a tradesman has been for more than two years from his trade —a sort of “ getting fit ” subsidy. Here is another problem not generally known—many of these unemployed men, owing to their unemployment extending over a long period, have accumulated liabilities so great that when offered a job at standard wages it is not by any means an unmixed blessing. Many instances have been experienced by our officers of men asking to be excused from accepting a full-time job, explaining that, with the pressure for repayment of debts that comes with regular employment, they will be worse off than they are on relief pay. To plan for relief is not as simple as is sometimes believed. “Talking of planning reminds me that the commission set up to report on the question of unemployment and upon whose report the present legislation was based anticipated in their report that the board, when appointed, should have six whole months in which to frame plans before being called upon to do any administrative act. Having seen service on the board since its inception, I can assure you that not for six consecutive hours has the board been free from administrative Responsibility and able to give undivided attention to forward planning. Only just now are we able to draw the picture—to measure up the job, so to speak. Nor would any plan drawn in 1929 be of much use to-day. Important world changes are going on all round us. Britain’s policy of a greater self-suffi-ciency is not a passing phase; it is more likely the beginning of a long-range revolutionary change in fiscal policy. A greater nationalism is to-day the predominant policy in every country. Each country appears to be seeking its own way of escape from its economic difficulties. New Zealand has been no exception. Exchange manipulation, Reserve Bank, Mortgage Corporation, unemployment legislation, agricultural commissions, have all been steps, wise or unwise, towards a way of economic escape. The time is opportune for a new orientation of, this problem of unemployment. The legislation should be re-designed to place greater emphasis on employment and less on the relief side of unemployment. It must be designed for long range planning. The only healthy recovery would be in the direction of greater self-sufficiency brought about by the creation of new secondary industries, improving the balance between our primary and secondary industries. Here_ is the rub. Whose responsibility is it to start new industries? CRITICISM OF THE BOARD "If one may take a line on the criticism that has been levelled at the Unemployment Board during the past four years, it would seem safe to assume that there has been a general expectation that the board, with a fund of £4,500,000 annually at its disposal, should in some way —the details never being suggested—provide full-time employment at standard wages for all the unemployed. It is clear that the board itself has no legislative authority to become an employer of labour. If you must insist, however, that the State should, accept the full responsibility for finding suitable standard employment for all those not required in the industries controlled by private enterprise—by yourselves—you will need to give thought to the question of withdrawing all of the objections you have previously held against the State’s incur-, sion into industry. Further, if we are convinced that for New Zealand the great need is a development of industry policy, and because of the attendant risk from the point of view of the investor nothing happens, I can see ns reaching the position —and more quickly than you might think—where it will become a live question, not whether the State should enter into industry, but whether we, as citizens, can afford the luxury of keeping the State out of industry and leaving the field to private enterprise. STATE INDUSTRY “To illustrate my reasons for making that point, let me assume that the State, as a means of providing employment, started some entirely new industry. I am refraining from suggesting any particular industry; but it could be hydrogenation of coal, steel, asbestos, rubber tyres, or any other industry entirely new to New Zealand. I am also avoiding any discussion of the question whether or not the State could successfully run an industry. I am more concerned with illustrating the national loss occasioned by large-scale unemployment of our fit men. If such an industry provided employment for 500 males between the ages of 20 and 65 at an average weekly wage of £4, and calculated on the-same basis of profit and loss as adopted by private enterprise the industry made an annual loss of £20,000, it would still mean a substantial saving to the State.

“ Enlarging further for the purpose of clarity—the direct annual cost to the State for relief aid to unemployed to-day is averaging 25s per week per man, and, whilst deemed to be hopelessly inadequate, means £32,500 for a year for each 500 unemployed, not counting administration costs. If these men were in employment averaging £4 per week they would contribute to the fund for relief of unemployment £4325 per annum. This amount, added to the cost of relief, brings the direct national annual cost to £36,825 for each 500 men, measured in contrast with employment at an average wage of £4 per week.

“This loss is yours and mine. It is no use asking what the Unemployment Board is going to do about it. It is no use either to ask the Government what it is going to do about it. What are you going to do about it? When lifting your hand in support of a resolution calling upon the Government or the board to provide full-time employment immediately for the workless, it would be useful to ask yourselves how you would react to an announcement by the Government that it was about to start an intensive State industrial development scheme. Or, to begin with, ask yourselves how you have reacted in the past to the plan of subsidising private industry as adopted by the Unemployment Board. EXPANSION OF SECONDARY INDUSTRIES “ That there is scope for development of new industries and additions to exuding industries is unlikely to be seriously questioned. That industries based on the investment of private capital will not b? established except in confident anticipation of a profit on the capital invested is equally sure. The board has the power

and the will to assist private enterprise with new industries by way of subsidies, grants, or loans. The results from this policy have so far been disappointing. Without expansion of our secondary industries, we shall not reduce our unemployment figures below 30.0Q0.

REDISTRIBUTION OF INCOMES “ The only alternative to making it possible for as many of this number as may be willing and able to work to earn their living by producing those things that we need but at present buy from overseas, and often from countries that do not reciprocate by purchasing our producte, is to sustain them by means of a redistribution of existing incomes—that is what our relief amounts to. Nor is it wise to assume that the genuine involuntary unemployed worker will for ever be satisfied with a standard of living less than that enjoyed by those- in employment. The present legislation does not give powers to the board itself to engage in the employment of men. In the last analysis the board for its success in getting men back into employment is dependent on the captains of our industry —you men here to-day. If we are not succeeding the failure is as much yours as it is ours. It is sometimes stated rather disparagingly that the Unemployment Board exists only to take the blame for the Government. Would it not be nearer the truth to say that the Government and the board are carrying the blame for the inevitable results of a system we all appear afraid to change? It is time to call a halt in complaining, because the Unemployment Board cannot make a five-horse power engine do a job requiring a 20-horse power engine. If there is delay in reaching the top of the hill —overlooking the rich valley of prosperity and more equal opportunity for all —remember we shall get there quicker if we all pull the same way. It is certain that before very long as a nation, and in common with other nations, we shall have to do some real planning for a better distribution of employment. It always appears to me that New Zealand is blessed with unique opportunities. The potential field for new industrial development is wider than in most other countries, despite our long distance from the hub of the universe. With some stability in our export prices, even at the lower level now experienced, it would no doubt encourage some extension of the public works policy, affording some measure of relief. Let the occasion be one for greater co-operation, and still further improvements in the relief measures may be possible. The main problem, though, of transferring back to gainful employment all those unemployed able and willing to work involves more revolutionary changes. It is to promote thought upon those lines that made me determine upon this type of an address to-day. I feel that some of the suggestions I have put forward, striking as they do against the roots of principles that have been long regarded as sacred, will not be readily accepted. My mind goes involuntarily to the immortalised story of the young man who, thinking in terms of long-range planning, asked the question of the Great Teacher, ‘ What shall I do to be saved? ’ It was not that he doubted the advice that caused him to turn sorrowfully away."