UNEMPLOYMENT INSURANCE. Prior to 1912 no country had a national system of compulsory insurance. The Brit ish National Insurance Act of 1911 was the first to incorporate compulsory unemployment insurance into the institutional struc ture of a nation. Since that time it has become a part of the legal structure of most of the leading nations of the world. The decade of the 193os has witnessed significant new developments, partic ularly in Great Britain, Sweden, and the United States.
Trade unions and friendly societies had granted assistance to unemployed members since the middle of the 19th century. A few towns and cantons in Switzerland established voluntary publicly subsidized funds from 1893 onwards. In 1895, St. Gall, Switzer land, attempted a compulsory system but the scheme ceased opera tion after two years. A more successful method was developed, known as the "Ghent system," under which municipalities and other local authorities supplemented the benefits paid by trade unions and other associations of workingmen to their members. This system of co-operation between the local authorities and the trade unions has been extensively used in Belgium, Holland, the Scandinavian countries, and France.
The British Act of 1911 covered but a few industries and 2,250, 000 workers. It was frankly experimental. The industries were construction, shipbuilding, mechanical engineering, iron-found ing, and construction of vehicles and sawmilling. Very few women were covered. It was essentially an insurance plan under which the employers and workers each contributed 21d. per week and the Exchequer a sum equal to one-third of the total receipts from employers and employed. The rate of benefit was 7s. a week for adults, half-rates for persons between 17 and 18 years of age. A one week waiting period was followed by a right to draw a week of benefits for every five contributions paid up to a maxi mum of 15 benefit weeks in one year. To obtain benefits a person had to show that he had worked in an insured trade in 26 weeks during the preceding five years, had applied at the employment office for work, had since been continuously unemployed, was capable of work and had not exhausted his right to benefit. He could be disqualified if idle voluntarily, through misconduct or be cause of a labour dispute. An insurance officer passed upon his application. His decisions could be appealed to a court of referees consisting of an employer, a workman, and an impartial chairman; from them to an umpire appointed by the Crown.
The Act permitted an association of workers which paid allow ances to the members to administer for those members the bene fits payable under the Act. This tended to encourage voluntary systems of unemployment assistance. So did another provision permitting the repayment to workers' associations, whether in in sured trades or not, of one-sixth of their expenditures on account of out-of-work allowances to their members.
An employer who kept a workman continuously employed for a year and paid at least 45 contributions in respect to him might ob tain a refund of one-third of his own share of the contributions. Workmen who attained the age of 6o and had paid soo contribu tions were permitted a refund of their contributions, with com pound interest, minus benefits they had received. Contributions first became payable in July 1912 and benefits became payable Jan. 1913. Obviously this was an inadequate period for the accumulation of reserves, but the War (1914-18) prevented any strain on the insurance system during its early years. Administered at first by the Board of Trade, it was put under the Ministry of Labour in 1917. A national system of employment exchanges was set up as a preliminary step to the establishment of insurance.
During the World War, employment in the insured trades was good and, though the collection of contributions went on, very lit tle was paid out in benefits. The result was a succession of sur pluses of income over expenditure down to the end of the war. In 1916 an act was passed which brought into insurance for a period of five years or until three years after the end of the war, which ever was longer, certain additional trades and all munition workers not already insured. The chief trades brought in were the metal, chemical, rubber, leather, and ammunition trades. Thus the total number covered by the insurance scheme at the end of 1916 was about 3,750,000, of whom about i,000,000 were females. These workers were brought into the scheme because it was anticipated that there would be considerable unemployment amongst them on the cessation of hostilities. No changes were made in the rates of contributions or benefit or in the general conditions. Benefits for men and women were the same, 7s. a week for adults.