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 abso lute inelasticity of the demand for labor with changes in its If the true equilibrium wage in a certain industry were $3.00 a day, then a wage of $4.00 a day would at tract 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 re ceived 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 unemploy ment which neutralizes, in greater or less degree, the appar ent gain of higher day-wages obtained by monopoly power. The very inertia of wages, however, in new price situations" 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.
§ 15. Individual maladjustment in finding jobs. Another kind of individual maladjustment is the failure of the jobless man to connect with the manless job. A certain amount of this maladjustment must exist in the most stable industries and in the most settled industrial conditions. Fluctuations occur in the market demand for the products of various estab lishments, requiring the taking on or laying off of some men. Fluctuations occur in the plans both of employers and of wage workers as a result of age, of removal for reasons more 11 See ch. 21, § 9, on the minimum wage.
or less non-economic, of desire to change occupations, of vari ations in health, and of countless other causes. The needs of the employer for a worker, and of the worker for a job, are mutual. To a large degree these various fluctuations are mutually compensatory, workers going and coming, orders in creasing here and decreasing there. Total jobs and total work ers capable of filling the jobs are at any moment in normal times equal quantities, if they can be brought together, the wage being adjusted, like any market price, so as to equilibrate demand for and supply of labor." But al most everywhere is lacking a real labor market. The substi tutes for it are largely ineffective: trade-union action, em ployers' associations, "want ads," cards in shop-windows, weary walks from door to door, lines of waiting men outside of factories, private employment agencies. At their best the
private employment agencies perform valuable services within limited fields, but they are uncoordinated and utterly inade quate to meet the chief need, and at their worst they are the instruments of great abuses against the unemployed.
§ 16. Public employment offices. Vigorous efforts to create local "free employment offices" or "labor exchanges" began in a number of countries about 1895. The movement gained headway in the next ten years and has since steadily grown. In Germany the chief exchanges have been founded and conducted by the municipalities (while others have been controlled by the unions and by groups of employers) and have remained largely decentralized, though cooperating to some extent through voluntary state conferences of officials of the exchanges, and after 1915 required to report to the imperial statistical office. The general results were remark ably good, although not completely satisfactory. In the revolution that marked the military collapse of Germany in November, 1918, the trade-unions got from the employers recognition of the principle of "parity" in the management of the offices of employment, along with recognition of the 18 See Vol. I, especially elm 7, 19, and 28.
unions, the eight-hour day, and various other claims that they long had urged.
Every industrial country of Europe has done something to provide free labor markets. Great Britain, after some ex experiment with a local system, established in 1909 the first national system of "labor exchanges." In America the move ment is developing in three directions—through municipal, state, and federal offices. These united, in 1913, in an "American Association of Public Employment Offices." In 1915 there were known to be ninety-nine state and city em ployment offices distributed through thirty states, besides federal offices operated in eighteen cities in connection with the Bureau of Immigration. The federal service in the De partment of Labor, the management of which had been much criticized, was brought to an end, just when most needed, in the midst of demobilization in 1919, by the failure of Con gress to appropriate the necessary funds. The clearly recog nized task is now to cobordinate these various agencies into an efficient national system, eliminating partizan politics and elevating the management of all branches to the plane of professional service. Through these agencies should be op erated an industrial service analogous in function to the Weather Bureau, and reporting from day to day the pressure of demand and the prospects for labor in various parts of the country. The economic results of a complete, exclusive, and efficient service of this kind would far exceed its cost to the community.