FAMILY ALLOWANCES The payment of allowances for children and sometimes for wives, grew up out of the economic conditions during and after the World War, though before that vestiges of it existed here and there in a few occupations, notably in agriculture, where payments in kind varying with the size of the labourer's family have long been general in most countries. During the war all the belligerent States paid allowances for the wives and children of the men in the fighting services, and in the public services of most European countries the war bonuses made necessary by the rise in prices were proportioned in some way to the size of the worker's family, or at least differed for married and unmarried. Probably these two war customs prepared the way for the rapid development which has followed in some countries: In the services of the State and of local authorities the pay ment of allowances for children has become established in all European countries except Great Britain, Portugal, Spain and Russia. The Federal Government of Australia gives the children of its employees an allowance of 5s. a week until the age of 14. In several of these countries (e.g., Switzerland and Italy) attempts have been made, so far unsuccessfully, to drop the payment as conditions became more normal.
The allowances do not vary with the remuneration of the worker, except in Holland, where they are expressed as a percent age of his salary, with a minimum and a maximum. Everywhere the allowances represent only a small part of the cost of a child; being on a flat rate they are more important to the lower paid than to the higher paid officials. They are paid up to the age of 18 (in Germany 16) ; later, if education is continued.
In America, there is a growing interest in the subject of family allowances. A movement is on foot in Canada urging upon the Federal Government of that country the advisability of passing, as soon as possible, a family allowance law applicable to the whole Dominion.
In the United States, an investigation of "Family Allowances in Foreign Countries" has been carried on by the Federal Bureau of Labor Statistics, and the results published in its Bulletin 4or (Washington, 1926).
Next to the public services, mining is the occupation where the system is most widely established. It is practically universal in the mining industry of France and Belgium, and is in operation in some of the mining districts of Germany, Holland, Czechoslovakia, Poland and Sweden. Here, as elsewhere, the allowance represents only a contribution towards child maintenance. In most countries the married workers' privileges include coal and in some a house free or at a low rate.
In France its development has been greatly helped by the device of the equalization fund (Caisse de Compensation pour allocations f amiliales) , which guards successfully against the danger that family allowances paid for by employers might prejudice men with families in obtaining employment. Such funds were first proposed in 1918 by M. Romanet, a benevolent Roman Catholic employer of the metallurgic industry of Grenoble. The idea spread rapidly, and in May 1927 there were 210 equalization funds in France, covering over 16,20o firms and 1,420,00o workers. Twenty-seven of the funds were agricultural. The method is simple :--The fund may be either "professional," i.e., confined to a single industry or kind of occupation, or "regional and inter professional," i.e., open to all employers who desire to join within a given area. The scale of allowances (which varies considerably in different funds) having been fixed, the number of children covered is ascertained at fixed periods, and each adherent em ployer is assessed for his share of the cost, the assessment being based either on the amount of his wage-bill, the number of his workers, or the number of hours worked. When the number of workers is the basis, some funds fix a lower scale for women and youths than for adult male workers. Some funds actually pay the allowances to the parents; in others the employer pays and subsequently claims from the fund the excess, or pays into the fund the deficiency of his payment over the sum due from him.
The allowances are usually paid monthly and, in an increasing proportion of funds, not to the workman but to the children's mother. It is found that this method is not only more certain to benefit the children, but less apt to arouse the jealousy of the single man, who is thus led to regard the allowances, not as an addition to wages, and thus an infraction of the principle of equal pay for equal work, but as a recognition of the separate service of parenthood. The desire for an increased population is shown by the grading of the allowances upwards, e.g., in May 1927 the rates of allowances averaged 27 francs per month for one child, 67 for two children, 115 for three, and 181 for four. In the leading funds the rates rise to 6o francs for one, 15o for two, and 24o for three children. Figures for the metal and allied industries fund in the Paris district, covering 200,000 workers, showed that the allowance for one child amounted to about 4% of wages, for two children to 1 o%, and for five to 4o%. Many funds also pay bonuses at childbirth (primes de naissance) and during the period of lactation (primes d'allaitement). Many main tain subsidiary health services, such as health visitors, day nur series, convalescent homes, etc.
The cost of the allowances to employers varies from 1 to 7% of the wage-bill. Including the public services, mines, railways and other large enterprises, which pay allowances directly, the number of workers covered in May 1927 was reckoned at 3,700,000, and the annual cost of the allowances at 1,318 million francs.
The system is increasingly popular with employers, who find their reward in the increased well-being and contentment of their workers. The attitude of the trade unions has changed from one of suspicion to a definite and cordial acceptance of the principle, coupled with resentment of employers' control and demand that it shall be made universal, compulsory and collectively controlled.
In Belgium, the methods adopted are modelled closely on those of France. Progress began several years later, but has been rapid; and the system appears equally destined to become a permanent part of industrial life, welcomed both by employer and employed. In his report for 1925, the British commercial secretary attributed the freedom of the country from industrial strife partly to this cause and said :—"It is almost generally admitted now that the family bonus system is of real economic value, and that by im proving the present and future conditions of the working class it is capable of exerting a direct and beneficial influence on the prosperity and producing capacity of the country." In Germany, during the five years following the World War the payment of family allowances was probably as common as in France but much less generally popular. Employers tended to regard the allowances as a temporary addition to wages which could be dropped when conditions became more normal. Hence few equalization funds were started, and the allowance being paid to the worker with his wage was apt to excite the single man's jealousy, while the married man feared to be prejudiced in seeking work. In 1925 the number of collective agreements containing family allowances showed a falling off. It is not yet certain whether the tendency will be permanent.
Scattered instances of equalization funds and of allowances paid by individual firms are to be found in Holland, Poland, Austria and Palestine, and to a minor extent in Czechoslovakia, Greece, Rumania and Switzerland.
In New Zealand a Family Allowance Act was passed by a Conservative Government in 1926 and came into force in April 1927. The allowance amounts to 2s. per week per child under 15 in excess of two children per family, up to income limit of £4 per week plus any sum payable under the act. The cost has been estimated at £200,000 per annum.
In Australia, since 1907, wages have been subject to a legal minimum, settled by the courts and supposed to be roughly based on the needs of the "normal" family of five persons (four persons in New South Wales). In 1919, owing to the discontent caused by rising prices, a Royal Commission on the basic wage, composed of equal numbers of representatives of employers and employed with an impartial chairman, was set up to determine what was the actual cost of maintenance of a five-member family at a standard of reasonable comfort. The sum fixed for each of the five states averaged f5 16s., the existing basic wage being then £4. The Commonwealth statistician promptly reported that the whole produced wealth of the country would not yield the amount that was necessary. The chairman of the commission, A. D. Piddington, then submitted the proposal that the basic wage should be based on the needs of man and wife and supple mented by an allowance of 12s. per week for each child, paid out of a State fund to which each employer should contribute Ios. 9d. a week per employee. He pointed out that the ordinary conception of the basic wage postulated 2,100,000 non-existent children, the total number of actual children (under 14) of em ployees being 900,00o. The only actual fruit of this proposal, up to 1926, was the aforesaid 5s. allowance paid for each child of a Commonwealth employee. In June 1927 a Conference of State Premiers referred the question to a Royal Commission. Mean while a Child Endowment Act was passed in New South Wales in March, 1927, providing for allowances of 5s. per week per child under 14 (up to 16 if incapacitated from earning). Allowances are not payable when the previous year's income exceeds the basic wage plus £13 for each child. The basic wage, assessed on the requirements of man and wife, amounted to f4 5s. per week in Oct. 1927. It is estimated that the endowment will cover 396,00o children at a cost of approximately five millions. This cost is met by a levy on employers amounting to 3% of wages-bill.
Although Great Britain possesses the earliest equalization fund in existence (in fact though not in name) in that established about a century ago by the Wesleyan community for children of minis ters, and although allowances for children are also paid in the United and Primitive Methodist Churches and in a few dioceses of the Church of England, the family allowance system has so far not taken much root in the country, except in the fighting service. The subject, however, has been widely discussed since the development of the foreign schemes. It is significant of its growing hold on public opinion that during 1925 the London School of Economics introduced substantial educational allow ances for the children of its professorial staff, the Independent La bour Party adopted as part of its programme a state scheme of children's allowances, and the Coal Commission report recom mended such allowances as "one of the most valuable measures that could be adopted for increasing the well-being and content ment of the mining population." The Case for Family Allowances.—Advocates of the prin ciple contend that as the national income or dividend is an un comfortably tight fit, it will be impossible to satisfy the general demand for a reasonably high standard of life so long as the needs of the family during the years of its greatest dependency are only met through a wage paid equally to the childless man. They further argue that the value of children to the community, as its future citizens and workers, is not adequately recognized by a system which assigns to the family unit an income no larger than that enjoyed by the single individual; that as a result the more thoughtful and ambitious workers are tending drastically to restrict their families, while the less thoughtful and less ambitious practice no such restriction. To this is added the plea that the maximum production of wealth will only be achieved when competition be tween men and women workers is at once free and fair ; and that this is impossible without "equal pay for equal work," and that this again is impracticable until family responsibilities are met by family allowances.
There is a division of opinion among advocates of family allow ances in Great Britain between those who prefer the foreign system of equalization funds paid for by employers, those who would like to see family allowances provided through contributory insurance, and those who believe that the whole cost should be met by the State.
BIBLIOGRAPHY.-E. F. Rathbone, The Disinherited Family (1924, Bibliography.-E. F. Rathbone, The Disinherited Family (1924, 3rd _ • P. H. Douglas, Wages and the Family (1925) ; H. H. R. Vibart, Family Allowances in Practice (1926) ; J. L. Cohen, Family Income Insurance (1926) ; E. F. Rathbone, Ethics and Economics of Family Endowment (192 7) ; M. Stocks, Case for Family Allowances (1927). Monthly Notes and other publications of the Family Endow ment Society, 24 Tufton Street, London, S.W. 1, from whom full bibliography may be obtained. (E. F. R.)