Unemployment and the labour market, 1870–1939

THE UNEMPLOYMENT PROBLEM

Unemployment is an enduring feature of industrial market economies – indeed it is often seen as one of the most unfortunate side effects of the capitalist system. Between 1870 and 1939 the understanding of unemployment, attitudes and policies towards it, and the scale and structure of unemployment itself, underwent considerable change. Before the 1890s the problem was perceived as one of personal deficiencies and lack of industrial quality among the workers concerned; by the turn of the century it was understood as reflecting lack of organisation in the labour market; and by the 1930s it was seen by many as a problem of the malfunctioning of the entire economic system. In mid-Victorian times, middle-class observers saw unemployment as the result chiefly of indigence or incapacity and largely a feature of the lowest stratum of society. For steady and respectable workmen thrown out of work by cyclical downturns, unemployment was temporary and its effects were ameliorated by self-help or mutual aid. But fact and circumstance conspired to alter these perceptions as awareness of, and concern about, unemployment increased. One ingredient was the findings of social investigators such as Charles Booth whose social survey of London revealed poverty and deprivation even among the families of relatively respectable workers. Another was the series of official inquiries ranging from the Royal Commission on Labour (1892–4) to the Royal Commission on the Poor Laws and Relief of Distress (1905–9), which took evidence on unemployment and the workings of the labour market. Such discussions were accompanied and informed by a widening range of labour market statistics collected by the Labour Department of the Board of Trade, which was formed in 1892.