§ 12. Extent and evils of unemployment. In every country and at all times where the wage system prevails, some wage workers, now more and now less, are "out of work" and unable to get it. The proportion that they constitute of all workers cannot, with the aid of any existing statistics, be exactly told, nor can exact comparisons be made between different countries. Of the magnitude, importance, and difficulty of this "problem of the unemployed" there is, however, no question. It is greatest, speaking generally, in manufacturing industries, though, among the various kinds, great differences in this respect appear. In 1900 the United States census reported that of all persons in gainful occupations 2.5 per cent had been unemployed more than half the year, 8.8 per cent from three to six months, and 11 per cent from one to three months, a total of 22.3 per cent more than one month.7 In 1911 in a large group (nearly all) of the manufacturing industries, the minimum number of wage-earners employed (in January) was 13 per cent below the maximum (in November). In some the difference was much greater (e. g., 24 per cent in the iron industry, 63 per cent in the brick-and-tile industry). Statistics of unemployment among trade-unions in New York and Massachusetts indicate that the annual average of unemployment is between 12 and 15 per cent. In some years upward of 10 per cent of all the working time of the wage earning population is lost by unemployment. A considerable part of the total in an ordinary year may be set aside as "normal" in the sense that it is allowed for in the wage- workers' plans.8 And a part of it may even be desirable.

Yet there remains an inconceivable sum of suffering in the lives of the workers, and an enormous economic waste of productive energy not only for them but for the whole community. The irregularity, and occasionally the excessive duration, of these periods of unemployment too often makes unemployment not a beneficent vacation (comparable to shorter hours), but a period of tragic anxiety, demoralizing and unfitting for return to work. Irregular work is generally recognized to be a greater cause of poverty and of actual pauperism than is a low wage regularly received.

7 Great importance should not be attached to these figures for they contain errors resulting from the inexact notions of inexperienced enumerators as to what constitutes unemployment, and from the inclusion of all persons gainfully employed, whether self-employed or in professional, salaried, or wage-earning positions.

8 See Vol. I, p. 207, on irregularity of employment as influencing wages, psychic income, and choice of employment.

It is impossible for the industrially more fortunate persons and classes of the nation (excepting the few who have learned by personal adventures or by sympathetic study of the problem) to comprehend how inevitably unemployment and the fear of it shape the social theories as well as the industrial character of the propertyless workers. The educated and the prosperous denounce with contempt mingled with inquietude the vagaries of the Industrial "Workers of the World and the destructive doctrines of Utopian communists. Such ideas are attributed to ignorance, to natural perversity, or, still more often, to the influence of ignorant and dangerous leaders. But, as an employer who lived for months as a manual laborer, has said: "To the worker the job is the axle of his entire world." It is "impossible to overstate the way in which the having of the job affects the whole circle of a man's life; all his thinkings, all his feelings, all his believings, all his attitudes and concepts and beliefs." "When we see men thinking 'queerly' or feeling 'queerly' and embracing strange philosophies, ... we ought to put our first question mark against the circumstances of their job."9

§ 13. Individual maladjustments causing unemployment. The cause or causes of the evil must be ascertained before a remedy can be intelligently applied. At the outset the problem of unemployment must be clearly distinguished from that of over-population and low wages. It is essentially a problem of maladjustment of the labor supply. That is, there is, under static conditions, work for all to do at various rates of wages that would bring about a value equilibrium of services.10 The maladjustments are either of an individual or of a general character affecting numerous in- ' dividuals.

9 Mr. Whiting Williams, formerly vice-president of the Hydraulic Pressed Steel Company, in an address, "The Job and Utopia." Bulletin of the American Association for Labor Legislation, March, 1921.

Individual maladjustment may be due to a mistake in choosing an occupation (e.g., through the vain ambition of one unfitted to be an artist, actor, lawyer, or teacher) ; or to failure to acquire by adequate training the necessary skill; or to loss of capacity by accident, old age, or failure of mental or moral powers: in all of which cases the problem verges upon or becomes that of the unemployable. The "can't-works" and the "wont-works" must be divided from the "want-works." If there is any remedy in such cases, it must be through reeducation, personal reform, or change of occupation.

Many persons look upon this type of cases as almost wholly accounting for the problem of the unemployed. They are confirmed in this opinion by the fact that the out-of-work group in any trade at any time is, on the average, the least efficient group of workers in the trade. This results from selection by the employers. This selection is due to the relative, not to the absolute, efficiency or inefficiency of workers, and must result whenever there are any discoverable economic differences in the workers (all things considered) that are employed at the same wage. This would continue even though the poorest workers were to raise their efficiency above that of the best men now retained. "Personal inefficiency" may explain a chronic low wage or absolute unemployability in a particular case, but it does not explain intermittent lack of work for those willing and able to work. Unemployment is a social. problem and not merely an individual problem.

§ 14. Maladjustment of wages causing unemployment. It seems highly probable that the artificial maintenance of a wage above the competitive, or value-equilibrium, rate of the individual, whether this be done by sympathy, by custom, or by the action of trade-unions, must cause some maladjustment of workers in relation to available jobs, and thus increase unemployment. To doubt this is again to maintain the absolute inelasticity of the demand for labor with changes in its price.11 If the true equilibrium wage in a certain industry were $3.00 a day, then a wage of $4.00 a day would attract to the trade more than enough workers to meet the demand for labor in normal periods (unless entry to the trade is controlled by monopoly power), and at length the losses from unemployment would balance the day-wages received in excess of the rate obtaining elsewhere for that quality of labor. Any artificial obstacles to change of occupation or to concessions in the kind of work done and in the rate of wages must operate to increase the maladjustment. This may, and doubtless often does, occur, and cause unemployment which neutralizes, in greater or less degree, the apparent gain of higher day-wages obtained by monopoly power. The very inertia of wages, however, in new price situations12 makes the wage workers resist vigorously wage reductions at times of unemployment. They know that if the wage rate is cut, it will not easily be raised again as times get better. Moreover, the difficulty here indicated is more particularly one occurring in static conditions, and is to be distinguished from the dynamic maladjustments next to be considered.

10 On static, see Vol. I, ch. 32; on the scarcity of labor, see Vol. I, ch. 18, § 2 and references there; on value of services and wages see Vol. I, ch. 18, especially § 2, and ch. 19, especially § 7. See also, below, ch. 25, on pressure of population with immigration.