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another, since these workers would have access in this common center to
opportunities in all trades. It has been proposed that this inter-occupational
mobility be increased by having the worker equipped with the technical
skill of two or more trades or occupations, in order to increase the possi-
bility of dove-tailing occupations.


Devine, Misery and Its Causes, pp. 126-28.

Thus the establishment of a central agency is expected to increase the
mobility of fluidity of labor, and this mobility is expected to be both inter-
occupational and inter-communal.

This organization of the labor market would require, also, the restric-
tion of entrance into certain casual occupations to those casual workers
selected by the agency for that purpose. This would make it necessary
to register a sufficient number of casual workers in a community to perform
the casual work of that community, to drain off the pools of unnecessary
casual laborers now continually underemployed, and thus furnish regular
and continuous work to the registered casual workers; this is the process
of decasualization of labor.

The English authorities have emphasized this function of the ex-
change more than the writers in other European or in American coun-
tries. See, for instance, Webb, op. cit, pp. 260-64.

Finally, it would be necessary to protect the labor market against sud-
den and unregulated increases in the supply of labor by an adequate con-
trol of immigration on the basis of the demand for labor of the kind offered,
for a definite control of the distribution of labor could not be secured un-
less there was also a definite control of the supply 6f labor. The regulation
of immigration would make necessary a co-operation between the system
of employment agencies in the United States and similar systems in foreign
countries from which immigrants come.

H. P. Fairchild, The Restriction of Immigration, American Journal
of Sociology, 17:641-46, March, '12.

It is assumed that th'e remainder of the program for dealing with un-

As outlined above, pp. 101-102.

depends on the public employment agency. First, the public employment
agency is expected to reduce unemployment to a minimum before other
measures are set into operation; it would appear to be a very inefficient
program, from the standpoint of the advocates of these agencies, for benefits
to be paid to the unemployed, when they might be employed if they had
information in regard to the opportunities for employment. Secondly, it is
assumed that the public employment agency is the necessary test of the
impossibility of finding work. In order to administer a system of insurance
against unemployment, it would be necessary to have other information in
regard to the impossibility of finding work than the statements of appli-
cants for benefits. In order to determine when benefits should be com-
menced and when they should be discontinued, it would be necessary to
have complete and continuous information in regard to the demand for labor.
Thirdly, the state would be unable to adjust its contracts, to commence or
discontinue public works for the purpose of levelling or regularizing the
demands for labor except on the basis of such statistics of the extent of
unemployment as would be furnished by the reports of the successful public
employment agencies. These reports are expected to be a delicate test of
the necessity for state action in increasing industrial activities to prevent de-
pressions. Finally, the decasualization of labor would be impossible except
by means of an administrative control of the distribution of casual labor
which would confine the casual work to a sufficient number of registered
casual laborers to enable them to secure continuous employment.

Because of this dependence of the rest of the program on the public
employment agency and the inherent importance of reducing unemployment
to a minimum by employment in regular industrial enterprises, it is assumed
that the establishment of the public agency is the first step in the solution
of the problem of unemployment.

This policy does not assume that the public employment agency in itself
would be a complete solution of the entire problem of unemployment, for it
sets up a much more general program, in which the employment agency is
only one, though the basic, element. It is not expected that the public


employment agency would make work for the unemployed, but only that it
would enable the unemployed to get in touch with the existing opportunities
for employment, of which, in many cases, they would otherwise be ignorant.
Thus the employment agency would remove the factor of ignorance and
lack of definite and accurate information from the problem of unemployment.

This factor is, however, accounted as a very large and important element
of the problem. It is denied outright that there is any general surplus of
labor, in the sense that there is permanently in a country a larger number of
workers than there are at any time opportunities for employment.
Beveridge, op. cit., pp. 4-15.

Moreover, it is claimed that in years of depression the actual output
of commodities, in terms of tale and weight, is not greatly increased and
that there are very many opportunities for employment which, because of
ignorance, are not utilized, because laborers are confined to certain occupa-
tions and to certain cities or even parts of cities. And in regard to seasonal
fluctuations, it is the assumption that occupations could be made to dovetail
almost completely if there was an adequate method of securing and distrib-
uting information, and, on the basis of this information, of distributing the
labor supply. Consequently, it is the basic assumption of this policy that
unemployment is due principally to maladjustments of supply and demand
at any one time, and that what appears to be a surplus of labor in certain
years or certain seasons is largely due to the failure on the part of the em-
ployes to secure the opportunities for work which actually exist. No one
has attempted to make a numerical statement of the proportion of unem-
ployment due to this maladjustment, but it is evident that the emphasis is
placed on this factor.

This is the ideal which has been developed on the basis of the actual
experience of employment agencies in Europe and other countries, and the
theoretical consideration of the situation with which these agencies are ex-
pected to deal. It is this ideal which is presented to the person who is seek-
ing information in regard to methods of dealing with the problem of unem-
ployment, and on that account the present study is confined principally to
a consideration of this assigned or ideal function rather than the functions
actually performed by the European agencies, for the agencies are for the
most part far short of this ideal. This ideal, moreover, is the expression of
the experts or leaders in the attempt to solve the problem. Consequently,
this assigned or ideal function, which the leaders have recognized as in part
Utopian so far as immediate realization is concerned,

Beveridge, op. cit., p. 198

will be used as the basis of judgment of the functions actually performed fey
existing agencies in the United States, after which a critical study of this ideal
will be attempted.


The Actual Functioning of Non-Public Employment Agencies in the United


In the earlier and simpler industrial system the towns were small, in-
dustry^ was relatively stable, and it was possible for the individual to have
fairly complete information in regard to the restricted labor market without
institutional assistance. But with the increase in the area, complexity and
instability of the labor market, there is no adequate opportunity for the
laborer by his own efforts to determine the demands for his labor, even in
territory contiguous with his dwelling or his place of work. Nevertheless,
the older methods of finding employment are still the principal methods,
for the technique of the eighteenth century labor market has been carried
over with little modification into the labor market of the twentieth century.
Notwithstanding the demands for organized and systematized information
in regard to the labor market and the immense social importance of regular


and continuous employment, the method of finding employment is one of the
purest survivals of the peddling and hawking economy, while practically all
other commodities are sold in well-known markets.

Beveridge, op. cit., pp. 197-98; G. Haw, From Workhouse to West-
minster, The Life Story of Will Crooks; Wyckoff, the Workers; Solen-

berger, op. cit., pp. 139-55; Devine, Report on Employment Bureau for

New York, pp. 22-24.

Even in European countries in which the business of placement has been
much more thoroughly systematized than it has been in the United States, the
workers depend primarily on informal and personal information in finding
employment, and their principal method is to hawk their labor from shop to
shop or from factory to factory.

Beveridge, op. cit, pp. 252, 253, 264.

A study of 759 employers in New York has shown that of this number
440 secured help only through the personal application of workers at the
plant, while only 292 combined with that method the patronage of various
kinds of employment agencies.

New York, Report of Commission on Unemployment, 1911, p. 161.

In the United States this evil of indefinite and inaccurate information is
increased by the haphazard direction of immigrants into occupations and
localities from the correspondence of friends.

F. J. Sheridan, Italian, Slavic and Hungarian Unskilled Immigrant

Laborers in the United States, Bulletin U. S. Bureau of Labor, 72:407-

408, Sept., '07; New York, Report of Commission of Immigration, 1909,

p. 110.

In hawking his labor the worker is in some cases entirely lacking in direct
information in regard to the situation, as the newcomer in a community would
be, though even in such cases the applicant for employment has indirect knowl-
edge which he has secured previously in a somewhat similar situation, and is
able to transfer his technique. In some cases the applicant for employment
has informaland personal information in regard to how to find work; he may
secure it from fellow-workmen, friends, strangers on the street, policemen,
saloon keepers and others not directly recognized as employment agents.
Habits are formed sometimes of applying for work at only one establishment,
and thus of limiting the opportunities for work; this practice is prevalent
among the workers in such establishments as the steel mills or stock yards
in Chicago; sometimes the applicant goes to a regular series of establish-
ments and sometimes he applies promiscuously; cases are reported in which
workmen toss up coins to determine the direction in which to start in the
search of work.

Beveridge, op. cit., p. 265; see, also, Devine, op. cit., 119-29.

Evidently the method of hawking labor is quite inadequate to give in-
formation in regard to the positions actually existent; even if the positions
are finally found, there is a great amount of time lost between jobs; and it is
' a wasteful and expensive method, for it is necessary to travel long distances
in search for work on the basis of mere rumors, stray hints and other infor-
mation which proves to be unauthentic. Such tramping is hard work, pro-
duces despair and hopelessness and easily leads to vagrancy.
Solenberger, op. cit., pp. 139-55.

It is an unsatisfactory system for employers, also, since production is
delayed, particularly in smaller communities, by lack of labor, and there are
at other times crowds of unemployed men loitering at the gates, requiring
attention and not being stopped even by signs "No Help Wanted."

Since it has become apparent that the individual workman is not fitted
to make these adjustments for himself, various institutions have grown up
whose purpose is to supply this assistance. The most important non-public
agencies of this type are the philanthropic, the private, the trade union and
the employers' associations, employment agencies. Some of these institu-
tions merely use this maladjustment as an opportunity of making profits;


others use it as a means of securing control of the labor supply; and others
are more concerned in the solution of the general social problem which is
presented by the maladjustment. -

The philanthropic employment agencies

For detailed descriptions of these agencies, see in addition to the
reports of the various philanthropic organizations, Devine, op. cit., pp.
109-18, 216-17, 227-31; Kellor, Out of Work, pp. 152-78, 237-45; New York,
Report of Commission on Unemployment, 1911, 57-58; New York, Report
'of Commission of Immigration, 1909, pp. 88-93; Massachusetts, 24th An-
nual Report of Statistics of Labor, 1893, pp. 81-115; Sargent, op. cit.,
passim; List of Free Employment Agencies, United States Department
of Agriculture, Division of Statistics, Circular No. 13, June 28, 1900.
are those maintained by charitable, religious, national or other associations
in the attempt to help applicants of a restricted class in which the association
is primarily interested. Neither individually nor collectively do they make or-
ganized efforts to solve the problem of unemployment.

The National Employment Exchange in New York City is an excep-

They have thus created a series of distinct and sometimes competing centers,
between which there is practically no co-operation. An investigation of six-
teen philanthropic employment agencies in Chicago in 1911 revealed the
fact that the operations of each of these agencies were entirely distinct from
those of other agencies, except that occasionally applicants who were not
in the class for which an agency was intended, or applicants for whom work
could not be found, were referred to some other agency. The philanthropic
employment agencies of Boston planned, in 1893, to establish a central agency,
but the plan was not carried out.

Massachusetts, Report of Board to Investigate the Unemployed,
1895, Part V., pp. lii-liv.

As a class, these agencies fail to organize the labor market in accordance
with the ideal function assigned to the public employment agencies, because,
also, they restrict their operations to one city, and only in isolated cases do
they attempt to organize the market in an inter-communal way. They seldom
have facilities for determining opportunities for employment in other com-
munities. When there is in a community no demand for labor, these agencies
are generally as helpless as the individual who is hawking his labor. There
are, however, some exceptions to this generalization. Of the placements made
by the manual labor department of the National Employment Exchange in
the fiscal year 1912, 58.9 per cent were outside of New York City, and 27.4
per cent were outside of New York State,

National Employment Exchange, 3rd Annual Report, 1912, Table
No. II.

but it was able only to secure the positions to which the workers were first
sent and could do nothing for them after that engagement ended. A small
amount is done by such agencies as the Industrial Removal Office in New
York City and the Federated Jewish Societies in Boston in the distribution
of Jewish families and single men to other parts of the United States, and the
Y. M. C. A. has representatives at Ellis Island, who assist the immigrants in
choosing destinations. As a class, however, these philanthropic agencies
either do no significant inter-communal placement, or else work only in
sending applicants away from the local city and do nothing to keep them em-
ployed after they have been sent out. There is no system of agencies which
is in touch with a wide area and between which there is constant communica-
tion, as is represented in the ideal system of employment agencies.

The philanthropic employment agencies, characteristically, are dealing
with the inefficient workers.

Devine, op. cit., 117-18; New York, Report of Commission on Unem-
ployment, 1911, p. 57.
Consequently, employers who desire efficient workers do not send to


such institutions for help. The employers who do patronize such agencies
expect to get only inefficient workers and they take advantage of this ex-
pected inferiority to secure them at wages lower than the market rate; it is
reported that workers were sent out from such institutions in New York
at wages of $5 and $10, when the market rate was $25 and $30.

New York, Report of Commission on Unemployment, 1911, p. 57.
Because of the reputed inefficiency of the applicants and the connection with
charity, the efficient workers are not apt to go to such institutions; and when
they do secure employment through such agencies, it may become harmful to
them, since they are generally shifted into the channels of casual work, and
casualization is one of the chief dangers of unemployment. There are many
opportunities to get into such casual work, but few opportunities to get out.
Moreover, in such work habits are formed which make it difficult for the
worker to return to regular employment.

Some of the charitable institutions have realized their inefficiency in deal-
ing with the problem of unemployment, and some of the most prominent
philanthropic employment agencies have, on that account, been abandoned.
It was for this reason that the three most notable philanthropic agencies in
New York City were abandoned namely, the Cooper Union Labor Bureau,
conducted by the Association for Improving the Condition of the Poor, the
Employment Bureau of the Society of St. Vincent de Paul, and the Employ-
ment Bureau of the United Hebrew Charities.
Devine, op. cit., pp. 13-15, 112-18.

It was decided that the connection with charity, the lack of capital and
the fact that it is a side issue to the real work of such institutions militate
against the work of employment agencies conducted by charitable societies
and that this work is, therefore, not a function of charitable societies.

Thus the philanthropic employment agencies have been of assistance to
some of the unemployed, but they have been of very slight influence in or-
ganizing the labor market, because they are not attempting to solve the prob-
lem of unemployment, because they have failed to co-operate, because they
have restricted their operations to particular classes and thus have become
distinct centers in the labor market, because they have restricted their efforts
principally or entirely to one locality, and because their applicants have been
generally inefficient.

A second kind of employment agencies is that maintained as a private
institution for profit. It is particularly important to determine the exfent to
which these private employment agencies have organized the labor market,
both because of the large number of such agencies and the recommendation
of the Massachusetts Commission to Investigate Employment Offices, that
these agencies "should be regarded as the recognized and proper medium for
bringing together the ordinary employe out of employment and the ordinary
employer with employment to offer."

Massachusetts, Report of Commission to Investigate Employment
Offices, 1911, p. 14.

There has been no study of the history of such agencies in the United
States, though it is known that there is a private employment agency in Balti-
more, which was established in 1823,

Maryland, 5th Annual Report of Bureau of Industrial Statistics,

and New York City has had ordinances regulating such agencies since 1835.
Neither has there been a comprehensive survey of the number of private
agencies in the United States or the number of positions secured by them.
Such agencies have not attempted to solve the social problem of unem-
ployment; they are business enterprises, maintained for pecuniary reasons.
Therefore, it is to their interest that unemployment should continue and that
it should be necessary for employers and workejs to call on them for as-
sistance. Consequently, their methods have been such as to yield them an
individual profit rather than to keep the workers steadily employed.



This competitive motive has resulted in the development of these agencies
as distinct centers in the labor market. This is seen particularly in the special-
ization of the agencies. The private employment agencies in Chicago in 1912
and the licensed employment agencies in New York City in 1910 were classi-
fied by the inspectors of private agencies as follows:

Private Employment Agencies in Chicago and New York Number of Agencies
by Classes of Laborers Assisted.

Type of Agency.


New York.



Unskilled labor



Theatrical performers



Clerical and mercantile



General labor






Hotel and restaurant workers






Farm and garden laborers


Seamen '. . . . .




Architects .. "




Total .



Though these two classifications are not entirely comparable, since one
deals with private agencies and the other with licensed agencies, which in-
cludes some of other types than private agencies, they show some of the
lines of classification between the agencies. But they have become specialized
in other ways than by occupations. Some agencies are limited principally
or entirely to persons of a particular nationality, color or sex; others have a
distinct clientele of employers; others have a distinct clientele of em-
ployers, built up on the basis of friendship, successful relations in the
past or other indefinite characteristic; some mercantile agencies deal only
with persons who can command a salary of more than $1,000 a year.
Moreover, such limitations have frequently been compounded; some agencies
limit their activities to one sex, one nationality, one part of a city and
one occupation. There is in New York City an agency which does nothing
except place Servo-Croats on the New York Central and West Shore
lines as freight handlers;

Survey 29:283, Dec. 7, '12.

in Chicago the Great Northern Labor Exchange does no work except in
placing workmen on the Great Northern and Burlington railways, and in this
work gives the preference to foreigners who apply for employment.

These lines of demarcation are not drawn closely in most cases, but
they are drawn sufficiently close to create a series of distinct centers be-
tween which there is little or no co-operation. Such agencies do not combine
to form a central agency, nor do they co-operate except in emergencies when
it is necessary to supplement their own efforts in order to fill positions. Thus,
it is reported that the Balkan Labor Agency in Chicago has a contract to
furnish track laborers for the Northwestern system, and since it is unable to
secure enough workers by its own efforts, it has made standing arrangements
with several other labor agencies by which, for a part of the fees, they assist
it when labor is scarce.

Not only do the private agencies fail to co-operate, but they are often
in most aggressive competition; especially is this true of the domestic agencies.
New York, Report of Commission of Immigration, 1909, p. 114.

As a result of this competition some agencies attempt to bind or hold
the applicant until a position is found; likewise some agencies have demands


for workers and try to conceal the fact from other agencies until they find
the applicants. Thus, it is possible that there may be at the same time persons
wanting work and employers who would employ such persons if the adjust-
ment could be made.

The occupational classification of private agencies makes it evident that
the great development has been in the field of unskilled labor and temporary
employments. In New York about 600 of the 750 private employment agencies
are domestic agencies,

New York, Report of Commission of Immigration, 1909, p. 114.
and in Chicago approximately one-third of the private agencies deal almost
exclusively with domestic servants. This specialization in the field of tem-
porary positions and unskilled labor is due to the fact that these agencies
find the largest profits in placing persons in situations which are apt to be

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