§ 17. Fluctuations of industry causing unemployment. Any one of the maladjustments in employment thus far con sidered may occur at a given moment, in static conditions of industry. But there are also maladjustments resulting from more general industrial changes throughout a period of time. The two main types of these are seasonal and cyclical changes, the one occurring within a year, and the other occurring within the longer period of the business cycle. At the downward swing of these seasonal and cyclical changes the number of would-be workers exceeds the number of jobs," and the re sulting unemployment is greatest when the minor and the major swings are both downward, about midwinter, in a period of industrial depression. Thus in 1893-94, and to a lessening degree in 1894-95, 1895-96, in 1907-08, and 1914 15. The unemployment beginning with the onset of the crisis in the summer of 1920 grew almost steadily worse, even after the return of spring in 1921, as prices tobogganed swiftly to lower and lower levels, and business of nearly all kinds was reduced in volume. The railroads alone, in des perate financial straits, discharged about 500,000 workers, and the total number of industrial unemployed in the nation was estimated to be from three to six millions.
Of course, employment offices alone are no remedy for the exceptional difficulties of such times, and the individual, whether he be an unfortunate "out-of-work" or a more forth nate well-wisher, feels helpless in the face of the overwhelming burden of distress. Such a situation is declared by the radical communists to spell the bankruptcy of the wage system ; while the most conservative students of the subject confess that this periodic chaos in the labor market is the strongest indictment of, and involves the gravest dangers to, the existing economic and social order.
§ 18. Remedies for seasonal fluctuations. But of late there has been a growing hope that an answer may be found to this economic riddle of the Sphinx. A number of different measures are being experimentally tested and applied. Many years of effort will be required for the perfecting of these plans separately and collectively. Some of these plans may be here indicated, however, briefly. To remedy seasonal fluctuations within the establishments, (1) output may be regularized by taking orders in advance ; (2) by producing various products successively in the same factory; (3) by overcoming weather conditions, as has been done successfully in brick- and tile making, ditch-digging, and building operations ; (4) by trans 14 See ch. 10, f S and § 7, on the industrial crisis.
ferring workers from one department of an establishment to another; (5) by improving the employment departments so as to build up a more stable force, thus reducing the great expense of "hiring and firing" and the loss through training "green hands"; (6) by varying the length of the working day while keeping the same working force throughout the year ; (7) by cooperating with other industries to build up a regular working force and transferring it from one estab lishment to another with seasonal changes.
Of great aid in a number of these measures is a broader in dustrial training for the workers, making them more able to change from one occupation to another. For this purpose every period of unemployment and of temporary shortening of the working-day ought to be used as a time for trade educa tion, by the recently devised and successfully applied "short unit courses for wage-earners." 15 § 19. Reducing cyclical unemployment and its effects. The maladjustments due to the movement of the business cycle are even more difficult to remedy completely, but will be diminished by every measure that helps to reduce the great financial fluctuations."' Further, many communities have al ready begun to plan large public works more systematically so that they may be carried on mainly when private business is more slack. A comparatively small amount of such emer gency work would maintain the balance of employment for a large part of the less skilled workers. It has been estimated by Rowley, an English statistician, that in the United King dom it would be necessary to set aside only 3 per cent of the annual expenditure for public works to be used additionally in years of industrial depression, in order to balance the wage loss at such times. This well-nigh in credibly small proportion may be compared to that between 15 See Bulletin of the United States Bureau of Labor Statistics, No. 159 (April, 1915).
is See ch. 8, § 6, I 7; ch. 9, § 6, § 8; ch. 10, § 14, I 16; ch. 14. § 12.
he weight of the gyroscope and the car or ship to which it ie applied. It is hardly to be doubted that hitherto, in America, public undertakings have been executed much more largely in periods of business prosperity, and have been diminished dur ing "hard times," thus greatly accentuating the harmful swing of the labor demand. Finally, unemployment insur ance, which has already been applied by parliamentary legis lation in Great Britain to a group of nearly three million wage workers, is an indispensable and highly hopeful measure of relief. The place of this in a general system of industrial in surance will be indicated in the next chapter.