Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-12-28

serve his sense of individual response
bility His family were kept looking to
him and not to any body behind him, a
union or the state, for the meal ticket
when the labor market failed in that
locality.
The years between 1904 and 1908
were slump years. The treasures Of the
trades unions were Quilted. Liberals
they look like conservatives now, but
they were very radical then, and Lloyd
George was in his heyday, batting the
dukes and bringing in peoples budget
were in power They wanted to get
the state into the business which had
so stimulated the growth Of the trades
unions.
This unemployment insurance sound
cd socialistic. But when you got down
70 it with accountants and actuaries
and examined the benefit records of the
chief unions you found that the risk
was measurable and could be insured
against at moderate premium like any
other risk. The grandioSe idea of pool
ing the unemployment risks of all the
workers and replacing the old trade
union machinery by modern plant-a
nationwide labor exchange system and
q compulsory system of contributory in
sIrance, with the employer paying S
cents, the worker cents and the state
3 cents-looked fine.
Put Through as Experiment.
It was accordingly put through as an
experiment scheme three years before
the war Only 100000 workers were
covered by it. They were in trades
which statistics showed were especially
liable to periodic fluctuations of pros
perity.
There were also various safeguards
on the lines of the old self-help union
principle waiting period OF a week
before the benefits began, no benefit
payable to any one under II, 10 con-
tributionS by the worker before he was
entitled to any benefit, one weeks ben
eft and no more for five contributions,
no more than Is weeks benefit in any
year. SO most dole schemes start. How
they end is another matter.
The system is and always has been
O tripartite one, with the worker con-
tr1buting his quota (now IA cents), his
employer his (now Is cents) and the
state its (noW a sum amounting to half
whatever the combined contribution of
worker and employer amounts to. But
notable changes have occurred. For a
start, the scheme has been kicked clean
OF Its actuarial and insurance basis and
Is now in the blue.
Trade In Cycles.
Trade goes In cycles. The trainers
Of the scheme recognized that They
called in actuaries and were advised
that their scheme was actuarially
sound, In the sense that income and
expenditure would balance over a pc
riod of from 10 to Is years, including
good, bad and average experiences of
employment. II unemployment was
light. a reserve would be accumulated
in the fund, which could be drawn upon
later on when the toll of the jobless in
creased. Conversely, deficit occurring
in earlier years of the cycle would be
met by advances from the exchequer-
lie, the taxpayer.
So far. so good. What had been fore
told occurred. One year the fund was
out about $50,000,0 600. Another year it
was in $l00,oo0,000. But that was
long ago.
AS I have said, the fund can borrow
from the exchequer in hard years. The
exchequer takes it from the taxpayer
Cand doesn't pay him backD. The limit
OF this borrowing was fixed by Parlia-
ment at $i50, 900, 900. No one thought
more than this could ever be needed
However, last Fall the limit was raised
to 5000, 100000, and IL went UP $50,000,-
900 at a time until in November's
last week it was notched up amid roars
OF protest from the opposition repre-
senting the taxpayers who have to
foot the bill to $350,000,0o0.
Taxpayers 70 Pay.
And this colossal overdraft sees the
fund through only, until the end of 1880.
In theory this loan will be repaid. In
fact 1t will be collected IN cash from
The taxpayers next year and it never
will be repaid. It would require 40
years OF boom conditions, approximate
ing those America enjoyed for the first
postwar decade, to accumulate in the
fund surplus big enough to wipe out
the overdraft
And, so far from booms being in
sight, many observers say that England
and indeed most industrial States, have
reached point where they will have
TO face for many years a permanent
Unemployment problem, owing to the
progressive elimination of human labor
by the machine and improved processes
generally.
Apart, then, from what has come
into the fund through 1880 from the
contributions Of employers and workers
plus the graduated State grant and has
been paid out again in doles the State
has had to find an additional $685.
100000, and is handing this bill to the
small body of income taxpayers Din
comes of more than $4,000 number less
b11dIl I1dll ulllllOn III 5IlJaln).
All this has come as a shock and a
surprise to the island folk outside the
Labor-Socialist circle (and they are
pretty sick, although for other reasons)
Which only goes TO prove that as Elm
stein demonstrated, things are not al
ways what they seem. The level road
upon which the statesmen Sociologists,
mathematicians and economists thought
they had set their scheme tosTun proved
kn ha nNdV - k.aN -.
and steady decline which took a steep
tilt as soon as strong radical element
crowded into front seat in the polit-
zeal arena. The whole scheme is now
toboganning toward bankruptcy, having
passed the insurance and actuarial
straight and narrow months ago at
high speed.
Actuaries Held Wrong.
Those actuaries have been all wrong.
Nowhere were they more wrong than In
their anticipation nine years back that
one-third of the insured population
would cut loose from the genefal
scheme by contracting out" by indus
tries Only two white collar industries
got out from the general plan by form
ing their own schemes and getting them
approved. These were the banking and
insurance workers, totaling only $4,000
persons all told.
No industry can get out now-at
least until the unemployment fund has
cleared of its debt to the exchequer
Not that any industry, having got the
dole habit, wants to get out The or.
ganized workers, talking through the
Trades Union Congress, want the tax
payer TO foot the whole bill, relieving
both the worker and employer of their
contributions, II they begin TO con-
tract out they defeat the end they are
patiently striving for. The employers
have also come to regard unemploy-
Ynent as best handled as a general risk
nLnnAirnr oil Industries Each nrrn,,r, is