UNEMPLOYMENT : ITS CAUSE AND REMEDY
[This article was awarded half of the prize presented by Mr Gabriel Wells for an essay on "Unemployment : its Cause and Remedy."l THE causes of our present industrial depression are many, but the origin of nearly all is due to war. The Great War has impoverished ourselves, and most of the nations who buy froni us, and industry, hampered by taxation, finds its products costing more than the con- sumers can or will pay.
During the War, when all our energies were concen- trated on winning the conflict, our exports were reduced or stopped, and foreign nations. produced the goods we formerly supplied, or bought frOm countries more happily situated than we were. Once a market has been lost it is not easy to regain it, and new competitors have arisen who struggle to supply the smaller demands of the world for goods and services. Our difficulties are accentuated, as many of our competitors, owing to a debased currency, lower wages or longer working hours, can produce at lower prices than the manufaCturer in this country, where these conditions do not prevail.
Before the War there was a steady stream of emigrants overseas, but owing to the altered conditions this stream has dwindled, and we must now strive to find employment for the increasing number of workers. The Great War is over, but war continues in Morocco and Syria, and China is rent by civil war, and each conflict disturbs trade and impoverishes our potential customers. Russia is in chaos, and whereas formerly a considerable portion of Germany's products went to Russia, the German manu-, faeturers must seek new outlets for their commodities; and thus intensify the competition in other markets. During • the War it was easy to make good profits and earn high wages, and probably we have not yet recovered from the inevitable lethargy that comes from high rewards for lessened effort.
These are the main' causes of the industrial depression, and many are beyond our control. Russia will sooner or later abandon her present methods, and anything that our Government can then do to rehabilitate her finances and her commerce will have a beneficent effect upon our industries. While war and improverishment, debased currencies and lower standards of living continue, our difficulties will remain, but it is essential that we shoUld turn our attention to those causes which we can control.
In some industries, such as shipbuilding, there is little demand for their products, but in most trades we could secure more business and employ more people if the prices were reduced. The most obvious and quickest way to reduce costs is to lower wages, but in the unshel- tered industries, which are in dire distress, the wages are already low, and no one would wish them to be further reduced, if any other method could be found to lower the cost of production. In the sheltered industries wages are relatively much higher, and the contrast causes graire dissatisfaction in the unsheltered trades. Any reduction in these favoured trades would be strenuously resisted, and unrest, strikes and lock-outs would seriously injure our prospects.
Is not the solution to be found in higher efficiency in its broadest meaning ? Better machinery and improved methods on the part of the employers, and higher out- puts and greater efficiency from the workers. High costs are inimical to the interests of capital and labour, and bring smaller prOfits and more unemployment. Lower costs can be obtained by the hearty co-operation of employers and employees. Waste of time and material, trade union restrictions, which needlessly increase costs and defeat the object of their introduction, and Ca' canny are regions where improvements could be made by the workers.
Some employers are conservative in their methods and slow to scrap their obsolete plant. a They must adopt improved methods of production, install the best machinery and use proper costing and efficiency systems. Anyone who has had a wide experience in any industry knows how much obsolete machinery and inefficient methods are unnecessarily raising costs. If the two sides in indus- try would combine wholeheartedly to lower costs, the workers would benefit by more employment and lower, prices for the commodities they buy, and the employers by more orders and better profits.
The workers desire to have a greater share in the profits they help to create, and profit-sharing or co-partnership would encourage them to reduce costs. In America— where high wages and relatively low costs co-exist—the workers are investing their savings in the shares of the industries in which they work. Thrift is desirable, and ownership brings responsibility and encourages efficiency. Firms who have offered , shares on favourable terms to their employees have found' the offer eagerly accepted, and the employee sharehOlders n'ecessarily realize the, need for higher efficiency. War in, industry is as harmful as war between nations. The tendency for employers and employees to become hostile. bodies, occasionally in open conflict, . cannot be satisfactory. The aim of the Joint Industrial Councils is to form a body where both sides can meet and discuss, to promote the interests of the industry. If this ideal could be extended, the round-table conferences could increase efficiency and co-operation, a new outlook in industry would be obtained, and a potent force for improvement would be developed.
There is no country, in the .world that is spending so much per head as we do on Poor Law, unemployment, health and pensions. Germany is spending about half, and France and Belgium about one-fifteenth of the sum per head of, the population we devote to these social services. Industry bears its heavy share of these ex- penses, and thus the cost of production is increased. How- ever desirable these services may be, we must cut our cloth according to our measure, and realize that further expense must not be incurred until industry has recovered.
These are but some of the means by which our industries may be resuscitated. . There is no one panacea for the ills from which we suffer. Each industry and each business must examine and overhaul its methods and organi- zation to find the solution for its difficulties. In spite of our present precarious position, we have a larger per- centage of the diminished export trade of the world than we had before the War. We have returned to the gold . standard which is essential to normal trading conditions ; our inventors and craftsmen are the equal of any in the world. We are not as an industrial nation " down and out." We need a " long pull, a strong pull and a pull all together" to meet the new and difficult conditions, and to prepare for the better times which are coming when the world has recovered from the aftermath of war.
W. HOWARD HAZELL.
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