It is usually assumed by employers, by wage workers, and by others in the discussion of the subject, that the burden remains and is borne by those who directly pay the premi ums, and just in proportion to their payments. This is an almost utterly mistaken view. There is, on the contrary, every reason to believe that the general principles of shifting and incidence of taxation apply fully Wages are not arbitrarily fixed; they result, as we must believe, from an adjustment and equilibrium of the various classes of labor in a general economic situation ; therefore, after a time, com pulsory insurance premiums become a part of that general situation. If premiums are paid by employers (by all, with out exception) they will ultimately result in lower wages, and if paid by the workmen will ultimately result in higher wages than if paid by the other party. Of course, there is some delay and friction in making the adjustment; but, under any settled policy, the adjustment, once made, will be main tained.
The true benefit of social insurance to workingmen is not that their wages are increased by the direct contributions of employers to the premiums, though there are doubtless some cases of "parasitic" industries and parasitic employers that now escape their due share of payments for risk, that would have to pay more to cover these risks under an insur ance system. The great benefits are that total wages and
losses are apportioned economically to the points of maximum utility; that accumulation of capital by and for the wage workers is made regular, automatic, safe, and in great amounts ; and that financial aid, physical care, and mental re lief from some of the most tragic anxieties of life are given effectively and economically to the masses of the people.
But, as has been indicated in another connection above, it 5 See ch. 16, § 14.
is far from being a matter of indifference, psychologically, where the first, immediate burden of premium payment falls. The persons paying the premiums, in whole or in part, are far more keenly aware of the cost, and alive to reducing and removing the evil conditions. Moreover, their interest is stimulated by the fact that they are the first to gain by any temporary economies, and the more so because of the illusory belief, sure to persist, that they are the ultimate as well as the immediate bearers of the costs.
The development of a complete system of social insurance along these lines promises to do more than any other single measure of practical social reform now under consideration to change the conditions and the outlook of the wage-earning class.