THE INFLUENCE OF THE WAR ON EMPLOYMENT.

WHEN the war first broke upon Europe there was no question. on which public opinion was more vague and uncertain than that of the effect on industry and employment. The most contradictory prophecies were abroad, and there were few who did not feel quite at a loss to choose between them. The general attitude was one of being prepared for anything that might happen. Certain consequences, it was true, were plain and clear. Trade with the enemy countries would cease entirely; and British trade with Germany and Austria was no negligible matter. Trade with the friendly belligerent countries would be very seriously interrupted, for the war must completely upset their normal economic life. Finally, trade with neutral States, especially with the neutral States on the Continent, would be curtailed by the risks of transport in war-time and the consequent increase of cost of freight and insurance. Factors such as these were definite and tangible they could be readily understood and appreciated; and, because they could be understood, their importance could be fairly gauged, and their consequences anticipated without wild surmise and in reasonably just perspective. Against these disadvantages there could be set certain advantages from the point of view of the immediate demand for labour, equally definite and tangible. There would be an immense increase in Government contracts, and a greatly increased demand for labour in those trades which could supply the needs of the military forces. Recruiting would withdraw large numbers from the labour market. Against the loss in foreign trade there would be a partial compensation in the larger home demand for those goods which had been hitherto supplied mainly from abroad. It was not, of course, possible to strike a precise or accurate balance of these gains and losses. Much must depend on the uncertain issues of the war. But so far speculation was at least in the realm of well-understood causes and effects; and it had to guide and illuminate it a large store of relevant experience of previous wars. But at this stage a new force had to be reckoned with, uncertain, mysterious, formidable.

What of the effect of war on finance, and of a financial collapse on the whole industrial system? Here past experience seemed of little value; because, apart from the unprecedented dimensions of this war, the credit system was known to have developed in recent years out of all recognition. Everyone knew that industry now was based to a degree far greater than ever before upon credit. Everyone knew that the maintenance of credit and the maintenance of confidence were identical things. Everyone knew that war was fatal to confidence. Would not the financial system go to pieces, and would not the industrial system share in its ruin? The Stock Exchange had been described as the economic pulse of the nation. What would happen if the pulse should cease to beat? Such were the vague and limitless forebodings with which many people awaited the economic effects of the war. It is possible to-day, with more than three months of war behind us, to bring the main issues to the test of actual fact. Broadly, alarmist prophecies have been refuted. Our financial system has shown itself possessed of considerable resilience and strength. The unprecedented strain has bent it rudely out of shape, but it has not broken it. Still, the financial confusion has been considerable: the noteworthy thing is how small a part has been communicated to industry. Despite the moratorium and closed Stock Exchanges, there has never, so far, been an amount of unemployment that can be called serious. In a number of industries, it is true, there are men and women out of work and a great many more on short time; but such distress is well within the limits of an ordinary depression of trade. It is noteworthy, too, that the unemployment which exists is in the main to be explained not by the vague, mysterious influence of credit, but by the definite and tangible factors first mentioned-the loss of markets, the difficulties of export, or the cutting off of a raw material. In particular it is to be observed how the dominating factor throughout has been the easily understood influence of Government demand. It was the commandeering of horses which in the early days of the war threw the cartage trade into disorder; it is the Government demand for uniforms which, in the woollen and worsted industry of the West Riding, has now turned what promised to be a period of depression into one of exceptional activity. Beside the operation of this single factor, the effect on industry of all the alarums of the financial world has been small indeed, a result which confirms the wisdom of those who place their faith in the underlying realities, and is a warning to the zealots of financial mysticism.

1

The tables which follow are taken from a White Paper 1 recently issued, which has been prepared by the Board of Trade, and which shows the course of employment down to the middle of October. They are the result of a particularly thorough and exhaustive inquiry, which reflects credit not only on the Board of Trade, but on the employers, who have been the main source of information, and who, in spite of a somewhat bewildering sequence of demands, have been at much pains and have displayed much patience in supplying returns. The investigation covers no fewer than 66 per cent. of the workpeople employed in large firms in industrial occupations, and 10 per cent. of those in small firms. The material thus provided is of a quality far superior to that usually available for estimating unemployment, and a number of indications point to the conclusion that the figures finally arrived at seldom deviate far from accuracy. In judging the influences at work in various trades and districts, the writer has been much assisted by a systematic Press-cutting record which is being conducted by the Garton Foundation.

I.

THE LEVEL OF UNEMPLOYMENT.

A general notion of the trend of employment in the country as a whole can be obtained from Table I.

TABLE I.

State of Employment in industrial occupations in September and October compared with the period before the War. Proportion of Employees on Short Time, left former employment and joined forces.

1 Report of the Board of Trade on the State of Employment in the United Kingdom in Mid-October. Cd. 7703.

II.

UNEMPLOYMENT IN PARTICULAR INDUSTRIES.

The percentages of unemployment in the various industries are shown in Table II. This table, it must be noted, applies only to industrial occupations, and includes neither railways, docks, shipping, the carrying trade, agriculture, clerks, nor shop assistants; nor does it include Government employment, in Woolwich Arsenal or elsewhere, which has expanded considerably since the war. It must be borne in mind that it shows not the amount or percentage of men actually out of work, but the increase as compared with the period before the war.

Certain features of the table stand out. The percentage of the men employed in July, who were no longer in employment in October, is 107. The percentage known to have joined the forces is 106. Almost all the contraction of male employment had thus been accounted for by recruiting; absolutely all, it is not too much to say, when it is remembered that the enlistment figures include only those known to have enlisted, and are therefore, to some extent, though it seems to a very small extent, incomplete. The figures for women yield a more favourable result than the impression generally entertained. In October the employment of women had been reduced by 62 per cent., a figure which is a decided improvement on the corresponding figure, 8'4 per cent., for the previous month. Nearly 50,000 women Nearly 50,000 women were re-absorbed in industry between September and October, leaving about 140,000 still displaced. A considerable number, it seems probable, have been re-absorbed since. A large number have obtained work in the many workrooms which have been set up all over the country. The percentage given is the percentage of those discharged from private employment, and of course includes those who have got work in the workrooms of the Relief Fund or any form of Government employment. Even in the case of women, therefore, the amount of actual unemployment is not large and is diminishing.

Short time exists on a much more serious scale. In October short time percentages were 173 per cent. in the case of men, 260 per cent. in the case of women. Of those affected, the majority, both of men and women, were working three-quarter time or more. A large number were working between a half and three-quarter time; while the number of those working less than half time was below 1 per cent. in the case of men, and

TABLE II.