Letters to the Editor
[Correspondents are requested to keep their letters as brief as is reasonably possible. The most suitable length is that of one of our " News of the Week " paragraphs. Signed letters are given a preference over those bearing a pseudonym.—Ed. THE SPECTATOR.]
THE MIDDLE-CLASS UNEMPLOYED
[To the Editor of THE SPECTATOR.] SIR,—The three articles which have recently appeared in The Spectator, on the subject of middle-class unemployment, inevitably raise the question of the most practical method of dealing with this problem. Taking an analogy from manual unemployment, the first thing uhich springs to mind is a form of unemployment insurance, where there are three alterna- tives before us.
First, a system of State insurance similar to that already in operation whereby both the employer and the employee contribute, while the State makes up the rest of the premium. This, however, has several drawbacks, which can be briefly sununarized as follows. In the first place, many unemployed executives—by executives I mean men in important adminis- trative position—today have . themselves been employers, and employers who wished to take advantage of such a scheme would be forced to pay a double share for themselves in addition to a single share for their executive employees. With the growth of the Limited Liability Company, which is the collective employer of individual employees, this would be eliminated. The second great objection is the proportionately far higher premiums which would be required to insure a benefit in any way commensurate with the requirements of executive men and their families, which would thus involve the country and individual businesses in expenses as great, if not greater, than those of the present unemployment insurance system, in spite of the fact that the class dealt with would be numerically smaller. A further disadvantage would be the compulsion necessary to make such a scheme workable, corn pulsion which would inevitably be resented by a class of men and women still eminently individualistic and independent.
Another suggestion which has been put forward is of similar nature to the present compulsory health insurance, whereby executives would be compelled by law to insure against unemployment through an approved society. This would obviously require the co-operation of the large insurance companies, who, in the writer's experience, have not so far shown a very favourable reaction to the idea of unemploy- ment insurance for executive men. The chief objection on the part of the insurance companies appears to be that, like sickness, unemployment is hard to prove. It also involves psychological factors beyond the control of the insurance companies. A Means Test of an invidious nature would be necessary and the whole idea would be fraught with un- certainty and prejudice.
The second idea is that of a voluntary scheme to be or- ganized by some central representative institution such as the British Executive Employment Society (which has already been mentioned in the columns of. The Spectator) based on a contribution from employees graded according to their salary with a fixed contribution for employers. Such a scheme might or might not have the support of the Government. It would be popular by reason of being independent and lacking all form of compulsion. It could be worked either by means of the large insurance companies or in spite of them, though there is no doubt that if once the idea became popular the insurance companies would be willing to take it up.
The third method whereby the problem can be dealt with, and that by which it is being dealt with most effectively at the moment, is that of individual insurance and pension schemes within business organizations themselves. Nearly all the large corporations in this country, and certainly all those with progressive men and ideas behind them, such as the Imperial Chemical Industries, Unilever, &c., have adopted such schemes. In most cases the idea of a pension pre- dominates, thus. dealing with Mr. Hamilton Fyfe's point in The Spectator .of March 2nd, but the idea of unemployment,is . creeping in. The great advantage of such schemes is the con- centration provided by the unit, which at the same time must of necessity employ a fairly..large executive staff to maize such a system- practicable. A very good example of such an
insurance scheme is to be found in the Bank of England and in several other prominent banks. Smaller businesses cannot afford to indulge in schemes which almost become inevitable to the larger combines and trust companies. Pension schemes of various sorts occur in a number of large organizations, but they do not include executives.
The increase of systems which include this category would go some way to remove the pressing necessity of a central comprehensive scheme. Such an increase, however, would still be bound to leave the executives of small businesses un- catered for, and would moreover make any scheme by which they could be dealt with very much more difficult to establish.
In conclusion, the writer would like to stress the value of a scheme to be worked through a central, representative, and independent organization such as the British Executive Employment Society, a committee of which is, at present drawing up a policy with the co-operation of one or two of the largest Insurance Companies. Suggestions, especially from acknowledged experts, would be extremely valuable, and all who are interested in this problem are asked to communi- cate with the Society at its offices at 133 Oxford Street, London, W.1.—I aril, Sir, &e., RONALD OGDEN.
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