The late Mr. Chodorov was well known as a preacher and practitioner of individualism. The Rise and Fall of Society (Devin Adair) was his book-length treatment of the subject.
It was an “accident.” The young couple had decided not to start raising a family until they had paid off some of the debts incurred in setting up housekeeping and had acquired other things so much more necessary than children. But nature had decreed otherwise, and the lady was obliged to give up her $70-a-week secretary ship.
The inconvenience was considerable; she would have to forego that spring outfit she had set her heart on, but there were mitigating circumstances. The husband had a good job. In addition, by registering herself as unemployed, she could draw $36.00 a week for 26 weeks at the unemployment “insurance” office (New YorkState). Considering that she would have no state and federal income, social security, and unemployment taxes to pay, the loss of income would be slight. Indeed, taking into account the saving in carfare and lunches, plus the wear and tear on her clothes, she might be better off.
No, the expectant mother was not destitute. When we read in the papers that some four million Americans are unemployed, the picture in our mind’s eye is one of widespread destitution, of what used to be known as “hard times.” We equate the word “unemployment” with dire want, of children going hungry, of women making old flour bags do for clothes, and so on. And we lend a ready ear to the heart-wringing speeches of the politician bent on “doing something about it.”
Looking Behind the Facts
Let’s examine how the government’s figures are arrived at and question the facts behind them. How many of the unemployed really want work, work of any kind that may be available? How many are voluntarily unemployed? How many are “in between” jobs, and therefore not available for any other work that may be needed? Are they the only breadwinners in the family, and is their unemployment reflected in a diminished table fare? Did they, during their employment, set up a reserve for just such a contingency? The government’s figures do not answer these questions.
Here and there a case of real hardship results from unemployment, and this is to be regretted, of course. Also to be regretted is the fact that the unemployed worker does not add to the nation’s fund of wealth. But, on the whole, are conditions quite as bad as the picture often read into the unemployment figures?
A person is unemployed, according to the Department of Labor, if during the week of investigation he is laid off temporarily because of bad weather, seasonal changes, illness; also, if he is on strike or otherwise chooses not to work. Any boy or girl over fourteen, and not in school, is unemployed, if so reported, because at that age one automatically becomes a member of the “labor force,” according to the Department; for that reason the number of employables increases during the summer vacation and diminishes when school opens.
This is not to find fault with the Department’s way of computing its figures on unemployment; they do the best they can with a problem compounded of many variables, not excluding psychology. Obviously, the Department cannot make a nose-count of the nation’s unemployed every week but must rely on a sampling process. The unit of computation is derived from the data brought in by interviewers who visit 35,000 selected households and rooming houses, covering 330 sample areas, distributed among 636 counties and independent cities. Every month the sample areas are changed. The data thus obtained is checked against the last census figures, adjusted for what is termed “standard error” and an estimate of seasonal changes in employment. As sampling goes, this can be considered reasonably reliable. It is probably far more reliable than the unemployment figures published by the unions, which are always higher than those of the Department.
However, the basic data for the computation is the information furnished by interviewees. The questions they are asked are standardized and cannot take into account their attitudes. A proud man may resent being called unemployed, in the firm belief that his superior abilities will shortly be called for. The confirmed malingerer, on the other hand, will report himself looking for a job while in fact he is thoroughly enjoying his vacation. Another will insist that he is looking for work even though he regularly turns down opportunities which he deems inconsistent with his ability or his station in life, or which pay less than he thinks he is worth; he can wait until the right thing comes along. The interviewers, though they are trained for the job, are unable to prod into such fields, partly because they are confined to the questionnaire and partly because they work on a tight schedule.
An unemployed person, as defined by the Department, is one who “did not work at all (at least fifteen hours) during the week of survey and who was looking for a job.” This includes those who are temporarily laid off and are waiting to be recalled, or who are scheduled to report to a new job in thirty days, or who are ill or believe there are no jobs of the kind they are fitted to fill. The phrase “looking for work” is quite indeterminate, depending on the judgment of the interviewee. The definition is perhaps as exact as can be devised, but the point is that those who qualify as unemployed under it are not necessarily destitute or even seriously inconvenienced by their condition.
“Help Wanted” Ads
That the unemployment figures do not mirror a condition of want is emphasized by the number of “help wanted” advertisements that were run during the time the Department was reporting 4.3 million unemployed. On one Sunday during that month (March 1959) the New York Times carried fourteen pages (nine columns to the page) of classified “help wanted—male” advertisements, five pages of “help wanted—female.” In addition, two full pages were devoted to agency advertisements, and every agency (there were over a hundred of them) was looking for a number of applicants. Almost every kind and degree of skill was in demand: clerks, glass blowers, plumbers, foremen, gardeners, high school graduates, frame makers, life guards, gasket cutters, everything. Eleven additional pages carried display advertisements pleading for applicants who could qualify for scientific and managerial positions.
All this space costs money, a lot of it, and it is obvious that would-be employers would not be spending it if the unemployed were knocking at their doors. And while it is true that most of the jobs offered called for some degree of skill, and some knowledge, the fact is that janitors and file clerks are needed where engineers are at work.
In the same issue of the New York Times, as against the 32 pages carrying “help wanted” advertisements, only 2 pages were devoted to “situations wanted” notices, and nearly half of these were placed by household workers.
The evidence that unemployment is not the problem it is supposed to be is supported by the newspapers of Detroit, a city held up as a horrible example. On the same Sunday, the Detroit News ran 6 pages of “help wanted” as against only 3 columns of “situations wanted” advertisements. The other two Detroit newspapers carried no notices from job-seekers, but did run a full page each of job openings. It would seem from this evidence that the unemployed numbers of the U.A.W. are not too discontented with their condition.
The experience of the householder or small businessman looking for temporary help supports the conclusion that unemployment during the last year was not synonymous with want. Getting someone to help with the chores around the house or store—fixing a drain pipe, cleaning out the attic, putting in a few panes of glass, painting the barn, removing an accumulation of furniture or books, a thousand and one things that have to be done—is next to impossible, even at $2.00 an hour. Evidently the unemployed can afford to be “choosey.”
Bailing Out Union Bosses
So, what is the substance behind all this clamor for “relief for the unemployed”? Among the most vociferous clamorers are the labor union leaders, and in their case the purpose is quite clear: handouts to the unemployed both reduce the competitive pressure on their employed members and help to support strikers at the expense of the taxpayers. Unemployment payments constitute a supplementary “war chest” for the unions. With the politician on the make, “relief” is a potent vote-buying device. The idea that tax-reduction would lead to investments and to job opportunities and thus increase purchasing power is a bit too farfetched for his immediate purpose. On the other hand, the socialistic mentality of the union leader cannot embrace the fact that increased wages, without regard for the supply and demand conditions of the market, has the effect of pricing labor out of jobs, of creating unemployment.
To be sure, involuntary unemployment and consequent hardship cannot be ruled out of the national picture. The coal miners in West Virginia afford a case in point. The situation here (and in other “distressed areas”) is that the consumer refuses to pay the cost of marginal production and has turned to less expensive sources of supply: to cheaper coal, to oil, to natural gas. But “relief” does not solve the situation, and Congress certainly cannot put a nice, new, rich vein of ore into these marginal mines. In former times, when job opportunities became scarce for one reason or another, workers loaded themselves into transatlantic ships or covered wagons and went to where job opportunities were more plentiful; thus, they not only earned for themselves a competence but also built a great nation. Granted that this escape from poverty is difficult, the best that can be done for “depressed areas” is to move the inhabitants, if they are not able to move themselves, to where their skills are in demand. Industrialists would do just that if there were no government unemployment compensation or relief and if the unions permitted it.
Handouts Aggravate the Problem
On the other hand, the schemes being advocated—more handouts for longer periods—cannot solve the problem. They aggravate it(1) by removing the sting from unemployment and helping workers remove themselves from competition, and (2) by increased taxes which add to production costs and diminish job opportunities. Take the case of the expectant mother cited above. Under the present New York state law, when her new-born babe is four or five months old and she is able to arrange for its rearing, she can go back to work for 20 weeks and thus qualify for 26 more weeks of unemployment pay.
Incidentally, she may enjoy her accouchement in Florida if she wishes. Under a reciprocal arrangement, the Florida unemployment office can act as an agent for New Yorkers residing in its territory. The Florida authorities do not bother to offer the New York unemployed job opportunities because Florida employers do not hire them.
One of the bills now before Congress proposes to make unemployment “insurance” available for 39 weeks, in all states, the amount of the handouts to be increased to one-half of the average pay earned by the worker during the three months of the preceding year when he earned the most. Were that enacted, our housewife might be listed as “unemployed” by the Department of Labor most of the year.