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gress, 1909, pp. 15-52; 43rd report, ibid., pp. 160-65; 44th Report, ibid., pp.
190-95.

While this attitude of opposition is not universal and seems, in fact, to be
the radical attitude, there has been a change from less to greater hostility in
England.



164 REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT

This European experience, therefore, is not conclusive in regard to the
probable attitude of American trade unionists, but at least leaves the possibility of
increasing hostility and of conflict unless the employers' associations develop
agencies so powerful that the unions are willing to compromise. Moreover, the
general conclusion from other attempts made by unions and employers' associa-
tions to secure a common basis of agreement is that there has appeared to be no
common standards on which both could agree, but that such attempts have been
merely compromises to prevent continued conflict and made on the basis of the
relative strength of the opponents. Consequently the conclusion is that the
unions would oppose the establishment of such employment agencies as those pro-
posed and would not at the present time be able to agree on a basis of justice
that could be used in the administration of such agencies, if joint control were
secured, in the trades in which unions have been formed.

The attitude of the employers' associations, also, must be taken into consid-
eration in determining the possibilities of development of the public employment
agencies. These associations in the United States have displayed no consistent
attitude, as a whole, up to this time, and the instances of extreme opposition to
public agencies are explicable in terms of the particular conditions rather than
of the principle. Moreover, very little is known in regard to the general prin-
ciples and philosophy of the employers' associations of the United States. But
these associations have been growing very rapidly in the last few years, and
have exhibited consistent attempts to overcome any form of union control of in-
dustry and to retain exclusive control of industry. While the employers' asso-
ciations of Germany have been willing in some cases to surrender their own
agencies and cooperate in the administration of general public agencies, there has
been great development since 1906 in the agencies maintained and managed exclu-
sively by employers' associations. Moreover, these German associations have
shown an increasing attitude of hostility toward the jointly managed agencies and
of consistent demands for their own agencies. In 1908 Dr. Flechtner, the Di-
rector, stated in a Conference of Employers' Exchanges, "The two principal
reasons for the formation of exchanges are the following: they facilitate the
control of the strikers and those locked-out, and they increase the powers of
the employers' associations in question."

Quoted in Bulletin de 1'association pour la lutte centre le chomage,
1:244, Oct.-Dec., '11.

The following paragraph in regard te employers' agen'cies was contained in a
secret circular sent to employers' associations in 1909, "The placement of work-
ers always has immense importance for the employers. It is only a platitude to
say that the one who controls a well organized agency can control the conditions
of employment. . . . The application of this principle in practice will be a
means of combat of first-rate importance."
Ibid. p. 245.

On October 29, 1909, the Union of German Employers' Associations an-
nounced the following program with reference to employers' agencies, "The
agencies must be in the hands of the employers, in the interest of the industrial
activity of the fatherland. The system of jointly-managed and public agencies
should be condemned,"

Kessler, Die Arbeitsnachweise der Arbeitgeberverbande, p. 10.
and on April 19, 1910, this program was made more explicit, thus, "Agencies
which are jointly managed by employers and employes should not be established
in the future and efforts should be made to abolish the existing agencies of that
kind."

Ibid. p. 10.

These expressions show that the employment agency is a weapon for the
employers as well as for the employes, and it is one which the employers' asso-
ciation seems able to wield with great effect. This offers a distinct possibility
for the development of employers' associations and consequently for opposition
to public employment agencies in trades, in which the associations are interested
or in which unions are organized.

These factors are not necessarily and inherently insuperable, but they are
evidence that the public employment agencies, first, have no clear conception of
the extent to which they can prevent unemployment by theii plan of organizing



REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT 165

the labor market, even if there is no opposition ; secondly, that the workers will
manifest a tendency to immobility which will reduce the value of the agencies
in the solution of the problem ; thirdly, that both employers' associations and
trade unions in the United States have advantages to gain by the maintenance
of their own agencies, and both have certain general principles, more or less
developed at present but, at least for the employers, probably capable of much
greater development, which 'will make the successful operation of the public
agencies along the lines indicated extremely difficult ; and fourthly, that the trade
unions have some policies which seem to be directly in opposition to the prin-
ciples involved in the policies of the public employment agencies, as planned ; the
promotion of inter-occupational mobility is an example of this opposition. When
suggestions of monopoly of placement are considered in connection with these
attitudes of employers and unions it becomes apparent that there is no immediate
prospect of a complete control of the distribution of labor; and when it is sug-
gested that the public agencies would make wandering in search of work un-
necessary, these factors are not taken into consideration. The plan to break up
the distinct centers in the labor market and to substitute one central agency ap-
pear, likewise, Utopian. This does not mean that the public agencies can not im-
prove the situation, for it is evident that there is distinct possibility of improve-
ment even within the lines laid down by the existing employment agencies. It
does mean that there are difficulties in the way of the successful operation of
these agencies in accordance with the assigned function, which may prevent any
large solution of the problem of unemployment by this means until other factors
in the situation are changed.

CHAPTER VI.



THE ASSUMED FUNCTION OF PUBLIC EMPLOYMENT AGENCIES
IN RELATION TO GENERAL SOCIAL PROBLEMS.

From the logical standpoint, the student should contribute to the solution
of any social problem, after he has come to a realization of the problem, by the
selection and collection of facts on the basis of a more or less definite hypothesis
or interest, reformulation of that hypothesis to take account of the facts col-
lected, selection and collection of other facts on the basis of the reformulated
hypothesis, and a continuation of this process of selection of facts and reformula-
tion of hypotheses until all the pertinent facts are gathered up in -one hypothesis
and can be submitted to the group for action.

The students of unemployment have started in that way; they have realized
the problem of unemployment, from the standpoint of its extent and effects : they
have generally taken the public employment agency as the solution which should,
hypothetically, be the beginning of this program for dealing with unemployment ;
and they have collected facts. But the data which they have considered have been
restricted, characteristically, to the data of unemployment. The facts of unem-
ployment have been isolated or abstracted from the rest of the social order, and
it has been urged that the public agencies, substantiated on the basis of these
abstracted facts of unemployment, should be established in the midst of a social
order which has not been taken explicitly into consideration in the formulation
of the solution.

The following types of facts are ordinarily considered : extent, causes
and effects of unemployment, inadequacies of remedies of the past, outline
of a plan for operation of public agencies which will reduce unemploy-
ment to the greatest possible extent. This may be illustrated by refer-
ence to the Report of the New York Commission on Unemployment, 1911,
or to Beveridge, Unemployment.

The fact that public employment agencies would prevent or reduce unem-
ployment does not in itself prove that they should be established ; relief work
might accomplish the same results, so far as unemployment alone is considered.
An adequate solution of the problem requires not only that unemployment be re-
duced or eliminated, but also that this solution shall not react on the general



166 REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT

social order in such a way as to intensify and complicate other social problems,
and produce conditions even more undesirable than unemployment. But the advo-
cates of the public employment agency have virtually said : Assuming that the
present industrial system remains as at present and assuming that public employ-
ment agencies will have no other effects than to secure work for people who
are unemployed, how should they be organized so as to accomplish that result
to the greatest possible extent? The possible effects of such institutions on wages,
conditions of work, the trade union movement, the efforts to regularize industrial
operations and, in general, on other social problems, have been generally neg-
lected by the advocates of such agencies both in the United States and Europe.
It does not follow that attention would have been paid to these possible effects
on other social problems than unemployment if such effects had occurred in the
operation of European agencies. This lack of explicit comment is not neces-
sarily an indication that the public agencies, which are admittedly far short
of the ideal, have not had bad effects, for the social situation is so complex that
it is difficult to trace bad conditions to a particular institution and, even in Ger-
many, the complete effects of public agencies are not yet necessarily apparent be-
cause of their relatively short period of operation.

Public agencies have, to be sure, been considered by their advocates as parts
of, and in connection with, the more general program for dealing with unem-
ployment. But this means that they have been considered as institutions neces-
sary for the successful operation of the rest of the program. The connection
of public employment agencies with the more general program is not in itself
a valid test of the desirability of such agencies.

It is very true that it is impossible to determine with certainty what the
effects of these institutions will be; but it may be worth while to indicate some of
the broader problems that may be involved in public agencies, in so far as they
succeed in securing an organization of the labor market and that have not been
adequately investigated. Definite knowledge and intensive investigation of these
problems may be sufficient to give the agencies additional substantiation or to
necessitate considerable modification in the general policy of such agencies.

If the operations of an industry are such as to throw some of the workers
out of employment, there are two general lines along which solutions might
proceed: (1) those industrial operations might be modified and made more
regular so that, thereby, the number of employes required by the establishment
be kept more constant; and (2) the industrial fluctuations might be taken as the
fixed and given, and the workers be shifted, when unemployed, to other occu-
pations or to other localities. The students of unemployment have generally
accepted the industrial fluctuations as the fixed and attempt to solve the problem
by the shifting of workers to fit the fluctuating demands of industry. Their ideal
is, first, to eliminate all possible unemployment by shifting the workers, and
then by the more rational letting of government contracts, to eliminate some of
the greater industrial fluctuations the cyclical depressions in regard to which
employment agencies are impotent. It is possible to have the other ideal : first,
to eliminate so far as possible all industrial fluctuations, not only the cyclical
depression, and then, second, to shift workers as required. The policy of com-
plete elimination of industrial fluctuations is apparently Utopian, in consideration,
especially of climatic conditions; moreover it would involve a considerable mod-
ification of the fashions and the habits of consumers, of the methods of pro-
duction and a considerable restriction of the private management of industry
for the sake of profits. How far such fluctuations could be decreased is quite
unknown, but there seems to be no valid reason why the problem should not be
attacked from this side as well as from the side of the workers.

Public employment agencies by increasing the facilities for the employes to
secure employment would increase, also, the facilities for the employers to secure
help. Is it possible that industries whose operations are now kept regular by
the difficulty of securing help might be made more irregular by an increase in
those facilities? Fluctuations in the number of employes required by an estab-
lishment are due in part to the modern "rush order" form of business. In 1895
the Massachusetts Board to Investigate the Subject of the Unemployed found
that "in the old days a manufacturer would often employ his hands during the
dull season in making up goods for which he expected to receive orders during
the busy months ; now the tendency is more and more to do an 'order' business,



REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT 167

to wait until an order is received, then to employ all the hands who can be
utilized, 'rush' the order through and then discharge the hands."

Massachusetts, Board to Investigate the Subject of the Unemployed,
1895, Part V, p. vii.

The iron and steel industry has a policy of "running a department at top
speed and under the heaviest pressure while there is an active demand fpr its
particular products and then shutting it down as soon as the market becomes
weak."

United States, Report on Conditions of Employment in the Iron and
Steel Industry, Vol. Ill, p. 21.

This is apparent, also, in many other modern industries. The purchasers by
buying in large quantities and at long intervals increase the competition for
their orders and thus secure lower prices.

New York, Report of Commission on Unemployment, 1911, p. 42.
Overhead charges, a sympathetic or paternalistic attitude toward the employes.
The Pullman authorities claim that during the depression of 1893 thev
accepted contracts at a loss in order to afford work to their employes. G.
R. Taylor, Satellite Cities: Pullman, Survey 29:119, Nov. 2, '12.
and the effect of unemployment on the efficiency of the working force

United States, Report on Conditions of Employment in the Iron and
Steel Industry, Vol. Ill, pp. 379-80; United States, Industrial Commission,
1901, Vol. XII, pp. 440-41.

tend to prevent such variations. To what extent the difficulty of securing em-
ployes in rush times is a preventive of these fluctuations is unknown ; but in so
far as it does have that effect, it is possible that public employment agencies
would tend to make industrial operations more irregular and thus to cause a
larger number of workers to be thrown out of employment. On the other hand
it is possible that the increased facilities of securing employment would enable
the best workers to select the positions of greatest permanency, and that this
would tend to make it profitable for industrial establishments to maintain greater
regularity of employment. There is still a further question as to whether in-
creased irregularity of industrial operations, even if the inevitable consequence
of public employment agencies, would be undesirable.

For various reasons, of which the difficulty of securing labor is one, efforts
have been made and are now being made to break up some of the artificial varia-
tions in the demand for labor in particular industries or occupations. Some em-
ployers have shifted employes from one department in its slack season to other
departments in which the demand is more active.

This is the practice in the firm of Hart, Schaffner and Marx in the
Chicago clothing industry. See, also, G. R. Taylor, loc. cit, p. 123.

In agriculture efforts are being made to adopt such cropping systems and
organization of work as will require a regular labor force during the year.

W. J. Spillman, Seasonal Distribution of Labor on the Farm, Year-
book of United States Department of Agriculture, 1911, pp. 269-84.

It seems very probable that such efforts to regularize industry and agricul-
ture, in so far as they are the result of difficulties of securing labor, will be
nullified by increased facilities of securing labor.

If any such results as the promotion of irregularity of industrial operations
or the nullification of the efforts to make industry more regular should appear,
they might be off-set by legislation that would regulate the hours of work, by
penalties on over-time, and similar measures ; it might be possible, also, to gen-
eralize the legislation of South Carolina which requires that employers must,
with certain conditions, give notice to their employes two weeks before a shut-
down occurs.

American Labor Legislation Review, 2:490, Oct., '12.

This would give the employes an opportunity to register at the pub-
lic agencies and to secure other employment. Also it is possible that seasonal
variations, if promoted by the public agencies, might be off-set by such arrange-
ments as that in the sugar refineries, by which two refineries are maintained in



168 REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT

readiness to start in times of unusual demand and are shut down when that de-
mand ceases, thus keeping the operations of the other refineries more constant.
American Sugar Refining Company, Statement, 1909, p. 1.

Emigration at the present time tends to reduce the number of the unem-
ployed in times of depression, at least to a small extent, since it reduces the
entire labor supply in the country. Emigration is undoubtedly promoted at such
times by the difficulties of securing employment. It is to be expected, therefore,
that any improvement in the facilities of securing employment would tend to
reduce emigration. Moreover, the foreign laborers, with lower standards of liv-
ing, would have an advantage in competing for positions in some occupations,
thus increasing the number of citizens unemployed. It might be possible to off-
set any such tendency by giving a preference to citizens, but such a method would
throw on to the community the burden of supporting those foreigners who do
not emigrate.

According to Webb, the provision of the Unemployed Workmen Act
which required twelve months' residence in a district, for eligibility to the
labor exchange, worked badly. Public Organization of the Labour Mar-
ket, p. 157.

One of the principles on which the public employment agency relies for effi-
ciency in reducing unemployment is the increase of inter-occupational ability.
The trade union movement, on the other hand, has been built up on the princi-
ple of the control of the labor supply, and 'the consequent inhibition of inter-
occupational mobility by apprenticeship regulations, and by other methods of
making it difficult to enter an occupation. The public employment agency and the
trade union appear, therefore, to be fundamentally in conflict. The trade union
attempts to reduce the number of persons who can compete for positions in its
trade ; the public employment agency attempts to break down the barriers between
trades to permit a greater fluidity of labor, and to enable workmen to secure posi-
tions without reference to craft lines. The trade unions of Germany have, to be
sure, cooperated with the public agencies, but this cooperation seems to be a com-
promise made in consideration of a similar surrender by the employers. What the
effect will be on the trade unions is not yet apparent.

There are many questions connected with the relationship of these two in-
stitutions which are, similarly, far from clear. There has been considerable dis-
cussion of the proper policy for the public aeency in times of strikes and lockouts,
and it has been generally agreed by the students of unemployment that the agencies
should be impartial, by which it has been meant that they should merely inform the
workers of the existence of strikes and lock-outs and permit the individual worker
and the individual employer to make the bargain on the basis of this information.
Since this assumes individual bargaining, it does not seem "impartial" to the trade
unionists, who are accustomed to insist on collective bargaining. However, the trade
unionists prefer such "impartial" agencies to the agencies of the employers, in
which the seeker for employment is frequently left quite ignorant of the existence
of industrial difficulties.

Efforts have been made to secure the support of trade unions, but the attitude
has generally been of this nature: assuming the general ideal, as outlined above,
what elements in it are of such a nature that they can be presented to the trade
unions in a way to win their support? There has been no fair consideration of the
possibility of destroying trade unions in case a monopoly of placement is secured
by the public agencies. In so far as the trade union rests on the control of the
personnel and the closed shop, this monopoly of placement, either by virtue of
law or of efficiency of operations, would apparently destroy the trade union move-
ment, and might turn it into a movement less desirable than the present one. In
general the problems involved in the relationship of trade unions and employment
agencies have not been adequately investigated and there is no satisfactory informa-
tion in regard to the effect of the policy of employment agencies, or in regard to
the possibility of modifying the policies to obviate whatever bad effects result.

The second general principle on which the public employment agency relies
for increased efficiency is the promotion of inter-local mobility. It is not sufficient
justification of a public agency to show that it will secure work for a person in
another community, which the existing agencies are unable to secure. The ques-
tion must be asked, Is this increased mobility desirable? The abstraction of the



REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT 169

data of unemployment from the general social order and the assumption that the
problem should be solved by shifting workers to meet the needs of an industrial
system which is regarded as fixed and given have resulted in plans and policies
which seem to consider the unemployed as parts of a machine, to be transferred
from a condition of unemployment to a condition of employment. The unemployed
have been dehumanized for the purpose of the solution of this problem. They have
not been considered as concrete human beings. There has been practically no in-
vestigation of the effects of increased mobility on the unemployed as human beings,
or of the effects on their habits and conduct of a transference from their primary
personal groups to other communities in which they are unknown and in which no
substitutes for these primary groups have been prepared.

Beveridge refers to this only in the following short footnote : "The la-
bour exchange affects only one obstacle to movement of labour, namely,
ignorance of where to go. It neither removes nor ignores other obstacles :
least of all does it, as some of its critics have urged, ignore the fact that
'workmen have homes.' Its aim is to give the workmen a chance, wherever
possible, between starving at home and getting work away from home. At
present lack of information leaves him in nine cases out of ten without this
choice." Unemployment, p. 203, footnote. This does not remove the diffi-
culty, however, for there are possibilities that the successful operation of
the employment agency might produce a mobility that would be less desirable
than unemployment.

The ideals of the individual are largely formed and maintained in the primary
group, in which there are intimate personal relationships and face-to-face contacts.


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