Jacob Billikopf The Life, Work, and Writings of Jacob Billikopf
THE SOCIAL DUTY TO THE UNEMPLOYED
By Jacob Billikopf, LL.D.
Executive Director, Federation of Jewish Charities, Philadelphia, Pennsylvania

 

Published in
The Annals of the American Academy of Political and Social Science Vol. 154, The Insecurity of Industry (Mar., 1931)

"Sorry comforters, are ye all. When will your windy words have an end?"
--Job 16:2

   In 1928, Charles A. Beard, the great political scientist, arranged a symposium on the question, "Whither Mankind?" In it was a chapter on labor written by the distinguished economist, Lord Passfield, better known as Sidney Webb. From it I quote the following as the background for my thesis:

"What American civilization seems most to lack -- from the standpoint of the vast majority of the heads of families who are 'hired men' -- is economic security. In spite of unparalleled private wealth, unusually effectively open to all, though necessarily attained only by a small minority -- in spite, too, of an average of earnings and individual savings, higher than the world has ever seen -- there remains the definite statistical probability that any given wage earner will, in the United States, find himself at one or other time, ruthlessly "fired"; that he will at one or other period in his life go through at least one prolonged spell of involuntary unemployment; that he will under one or other of these trials exhaust all of the family savings; that his wife may be left a widow, and his offspring at a helpless age orphaned, without any adequate maintenance; that his children may grow up insufficiently protected against disease and very inadequately educated; and that, if they or their parents live the allotted span, the chances are that they will find their old age one of extreme penury, and possibly of dependence on charity."

IN SUPPORT OF SIDNEY WEBB'S FINDINGS

   As Executive Director of the Federation of Jewish Charities in Philadelphia, the second largest of its kind in this country, I have been aware that virtually every year from 1921 to 1929 the expenditure for the care of destitute families in their own homes was steadily increasing. Ten years ago two relief giving agencies in the Federation spent approximately $75,000 for the care of needy families. In 1929 the allotment to these two organizations amounted to a little over $500,000, despite the virtual cessation of immigration and the great prosperity which we were ostensibly enjoying during the major portion of the decade. What is true of the Jewish Charities in Philadelphia is in large measure true of all other large welfare funds. In the light of this local experience, Sidney Webb's general analysis struck a sympathetic chord.

   As Impartial Chairman in the Men's Clothing Industry in the City of New York during the past eight years, I have found that the men and women in the clothing industry, especially in the metropolis, have not averaged more than thirty-two weeks' employment in any year in the p0ast decade, with the exception of the cutters, who constitute the most skilled element in the industry. The situation has been even more acute in the ladies' garment industry, about eighty per cent of which is located in and around New York City. In 1927, a highly prosperous year, the International Ladies' Garment Workers of America conducted a strike which lasted several months. One of the essential demands of the workers was a guarantee of thirty or thirty-two weeks' employment a year, which was denied. My experience, not only in the clothing industry but in other branches of manufacture as well, confirms the statement of Sidney Webb that often the American employee will go through prolonged spells of involuntary unemp0loyment, and that, under one or other of those trials, he will exhaust the family savings and provide the cause of other ills.
 

THE PROSPEROUS PERIOD

   On the other hand we know that for a number of years prior to the Wall Street crash of October, 1929, may large industrial corporations were reporting huge profits. Virtually every important corporation declared one or more stock dividends. Business was highly prosperous. Delegations consisting of industrialists, economists, and statesmen were coming from all over the world, attempting to analyze the cause of our prosperity and hoping that their respective countries might adopt our technique and our tempo. Wages in the United States were higher than those ever attained in any other country; the wage level reached by American labor was the envy of the entire world, while, what is more important, the share of labor in corporate securities was ostensibly increasing by leaps and bounds. Towards the close of 1929 American prosperity struck a gait of magnificent acceleration, statistically if not humanly considered, so that nearly every one felt that the problem of poverty was solved. As Stuart Chase has put it, "one saw a radio in every room, a bathtub in every closet, an art museum in every township and a Little Theater on every village green."

   There were economists in this country, led by Professor Thomas N. Carver, who assured us that the millennium had arrived. In his book, "The Present Economic Revolution in the United States," Professor Carver, after reviewing the wide distribution of Austrian and Japanese loans and the great increase in employee stockholders in public utility and other corporations stated:

   "These and other figures presented show clearly enough that the sum total of investment by small investors, presumably in the wage working class, is perhaps a small percentage of total investment in the country. They are obviously a long way from getting control of the industries of the country through their investments. That, however, is not an important consideration. The significant thing is that the laborers have money to invest and are actually investing in increasing numbers, thus becoming small capitalists and getting a large share of whatever profits are made by large investors."

   Now, as we recede from this picture, what are its negative facts? Again I quote from Stuart Chase:

"With an average annual wage of well below $1,500 in 1929, with the majority of all farmers operating at a net loss, with the slums of Megalopolis reeking as heretofore, with a million little children in the mines and mills, with technological unemployment gaining slowly but probably steadily throughout the period, with industrial accidents on the increase, and 30,000 citizens slaughtered on the highways every year -- we should hardly be justified in claiming that we have entered even the anteroom of Utopia. Statistically, our progress was sublime. Humanly, it left much to be desired."

   In April, 1929, when the stock market was at its height and we were enjoying the greatest prosperity in the history of our country, the Industrial Research Department of the University of Pennsylvani8a, in collaboration with the Attendance Officers of the Bureau of Compulsory Education, completed a house-to-house canvass of 166 Philadelphia blocks to determine the then existing extent of unemployment.

   This survey has been accepted by the United States Bureau of Labor Statistics and is summarized in its Monthly Labor Review for February, 1930. Involving 31,551 families, comprising 58,280 wage earners, the percentage of unemployment in this group was 10.4 per cent. Conservatively speaking, 85,280 wage earners, usually employed, were out of work in Philadelphia in the Spring of 1929. I am fairly certain that similar studies in New York, Chicago, Detroit, Cleveland, or any other large urban center would have revealed the same story.

   Now that the moratorium has been lifted and the truth about unemployment can be told, we find that in Philadelphia, priding itself as "the City of Homes," there were issued 3,456 sheriff's writs in 1926, a writ covering anywhere from one to twenty houses. Conservatively, over 4,000 homes went under the sheriff's hammer in 1926 because folks could not save whatever equity they had in their homes. In 1927 the number of writs went up to 4,869; in 1928 to 7,280; in 1929 to 9,703; and in 1930 to 15,600. In the last five years, during four of which we were the beneficiaries of extraordinary prosperity, probably more than 45,000 homes were sold in Philadelphia by the sheriff because of the owner's inability to met taxes or payments on mortgages. What a sad commentary that is!

IS THE SITUATION NEGLIGIBLE?

   "What of it?" says the critic. "Suppose there were 85,280 people out of employment in the spring of 1929? Suppose 45,000 homes were lost in four years in forces sales? Is it not a mere incident in the great material progress we have achieved, the like of which has not been attained in any other country? Did not Mr. Hoover, in his recent address before Congress, point to the fact that there is estimated to be a constant figure at all times of nearly 1,000,000 unemployed, who are not without annual income but are temporarily idle in the shift from one job to another?"

   True, Mr. Hoover did say that at any one time we have nearly 1,000,000 unemployed, and this should certainly be a source of great comfort to us, just as we should derive satisfaction from the knowledge that some folks in Chili or Peru or Bolivia are worse off than we. But do those who quote this saying of Mr. Hoover's with approval realize that when men are compelled to shift from one job to another, with long intervals of unemployment in between, they come to their new jobs in an unfit, unsteady, demoralized condition? Do they realize that the unemployed of today thus often become the unemployable of tomorrow, that the man who wants work today and cannot get it is probably incapable of doing any work if it is offered to him six months or a year hence?

   Are those who point to the fact that there is a constant figure at all times of nearly 1,000,000 unemployed (and the chances are the figure is more nearly 1,500,000) familiar with two studies that have been made on this subject -- fragmentary, to be sure, but both indicating what pathos and tragedy lie beyond that innocent figure of 1,000,000 people out of employment? I refer to an article in the Journal of Political Economy, August, 1929, written by Professor Robert J. Myers of Grennell College, entitled, "Occupational Readjustment of Displaced Skilled Workmen." It concerns itself with one phase of the men's clothing industry in the city of Chicago. From 1921 to 1925 Chicago's percentage of the total wage earners in the industry droppe3d from 18 to twelve and her percentage of the total value of products fell from eighteen to eleven. By 1926 it is probable that there were five thousand men's clothing workers in Chicago who could not get any work in their industry. Many others were working part time.

ECONOMIC EFFECTS OF UNEMPLOYMENT

   This particular study relates itself to some four hundred cutters who found themselves entirely without work and were given a dismissal wage by Hart, Schaffner & Marx and other large concerns. What happened to these cutters? After a lapse of several years, only one quarter of these skilled men were engaged in an occupation at all similar to that which they had left, and only one out of five was at any closely related trade. The others were widely scattered. Further, the study shows that the men had lost an average of more than five months before getting any regular employment at all. Almost half of them earned less than they had earned as cutters. They had become janitors, drivers, truckers, grocers, confectioners, real estate and insurance agents, and so forth, and in the main their status was worse than when they were employed as cutters.

   Another study of the displaced worker was made by Professor Isador Lubin of The Brookings Institution, entitled, "The Absorption of the Unemployed by American Industry." Over 750 persons were interviewed. They had formerly been employed in more than twenty industries, and represented a great variety of crafts. A large majority of those interviewed had considerable difficulty in finding new employment. Of the 754 only 410 or 54.5 per cent had found steady jobs at the time they were seen by the investigators, and 334 or 45.5 per cent were still unemployed. Of those employed, only a small percentage had secured permanent jobs within a month of discharge; the majority had been idle for more than six months. In a word, dispossessed workers do not easily find new employment. The rapidly growing "newer" industries and service trades do not absorb the dispossessed worker as quickly as is generally believed. The transition from one type of employment to another in most cases is made with a sacrifice of income. Almost one half of the workers said they received lower wages at their new jobs than they had at their old. Relatively fewer of those over forty-five years of age were able to secure new employment.

   What I want to emphasize by these citations, particularly the studies made by Professors Myers and Lubin, is that even during our highly prosperous years we have had a large body of unemployment, and that, although labor is mobile as regards its movements from industry to industry, a large majority of dispossessed workers exhaust their savings during periods of unemployment and many of them are compelled to appeal to our charitable institutions for aid.

   Today we are the victims of an unusually severe economic disturbance What is the character of the man out of employment? I raise the question because we hear even intelligent people say, "Aren't the men in our bread lines typical bums? Why should we have any responsibility for them?" As one identified with philanthropies -- sectarian and non-sectarian, private and public -- for a quarter of a century, I am prepared to say that not one of us could walk by a bread line and see even the most unkempt and ragged man in the line without saying to himself, "There, but for the grace of God, am I." I concur in Heywood Broun's findings when he started at the bottom of a line of 3,700 men in order to work up. More than three quarters of the men in the line were eager to work -- at anything. One quarter of them held steady jobs until the depression. More than half had never been in a bread line before in their lives. And in the richest city in the richest country in the world, there were many such bread lines on Thanksgiving Day.

   Russell Owen, the New York Times journalist, who accompanied Admiral Byrd on his Antarctic Expedition, paints the picture of those lines in which these poignant words:

"One of the most vivid impressions obtained from visiting the bread lines and the waiting rooms of the employment agencies is their silence. Men and women stand wrapped in the bitterness of their thoughts, eyes for the most part unseeing, bent on some inner misery of spirit. Men lean against the wall, waiting for their bowl of soup. And if one talks to the man next to him, it is almost in a whisper and in monosyllables. Then his eyes drop to the floor again and he broods. There is impressed on the observer the feeling of a group catastrophe, a depression so great that it is inarticulate, so inexplicable that there is nothing to say. They stand and they wait, and they wait interminably for soup, for jobs, for beds, knowing that they will wait again next day."

INADEQUACY OF PRIVATE CHARITY

   How are we meeting the situation? As a social worker I have no hesitation in saying that although we are spending in the United States hundreds of millions of dollars a year in the maintenance of our private philanthropies, we are bankrupt when it comes to tackling the situation which confronts us.

   Consider this. In the city of Philadelphia our Welfare Federation recently instituted a campaign for $3,800,000 with which to care for its 120 constituent organizations. The Welfare Foundation fell short $600,000. But even if the objective had been reached, only about $400,000 would have been placed at the disposal of the Family (Welfare) Society for the care of needy families in their own homes, an amount which is one half what the city has required in any one of its prosperous years from 1923 to 1929.

   In Philadelphia we have created a Committee for Unemployment Relief and are making a desperate effort to raise additional funds with which to care for poor families and for thousands of children who come to school without breakfast. Out of this fund it is hoped some work may be created.

   Although it has been my privilege, as Chairman of the Committee of One Hundred on Unemployment, to help bring the Committee for Unemployment Relief into existence, I know from vast experience that no amount of private charity, on however grandiose a scale it be conceived or executed, an succeed in preventing or even effectively mitigating the ever-spreading demoralization that results from unemployment.

   Assuming that Philadelphia's relief workers will bee fortunate enough to obtain an additional five million dollars, what a pathetically small amount this will be in a city where there are from 150,000 to 180,000 out of employment! Conditions in Philadelphia do not differ one iota from those that prevail in other industrial centers.

   In order to avoid the flood, the dike that holds back the water must be complete and equal to its need. And the dike is altogether different from what Silas Strawn, ex-president of the American Bar Association and Chairman of the Board of Directors of Montgomery Ward & Company, had in mind when he said to the Chamber of Commerce in Boston: "Give more freely than you have ever given before. You are not called upon to invest in an insurance against socialism or something worse."

   Even the far-visioned Owen D. Young was mistaken when, in recently addressing a corps of workers in New York who raised $8,000,000 for emergency relief, he stated: "We are not dealing with charity, but with the equalization of the impact of a disaster." How could so insignificant an effort equalize the impact of such a disaster? On another occasion Mr. Young spoke of unemployment as "a blot on our intelligence, a drain on our sympathy and a promoter of charity which affects disadvantageously those who give and those who receive."

   What about unemployment as it affects our social agencies? I wish every one could read Miss Emma Lundberg's "Study of Unemployment and Child Welfare," a study of two typical American communities, prepared in 1923 under the aegis of the Children's Bureau of the United States Department of Labor, headed by Grace Abbot. Emma Lundberg shows conclusively that the frightful results of a period of unemployment last for many years. Undernourished babies grow into rickety children. Boys who are taken out of school become limited in later life to an unskilled labor. broken homes mean a considerable addition to the number of juvenile delinquents. Various relief agencies will be dealing with the effects of our present unemployment for the next five years, possibly the next ten years.

INDUSTRY CANNOT CONTROL UNEMPLOYMENT

   Before I speak of the "dike" to withstand these waters of disaster, which is to be complete and coextensive with the danger, may I direct your attention to a thesis advanced by President Leo Wolman? No one speaks with greater authority on the subject of labor economics. He says if the present situation could be regarded as an isolated phenomenon, unknown in the past and unlikely to appear again in the future, we might look upon it with equanimity, as an unpleasant but passing phase in the healthy readjustment of business and industry. Unfortunately, there are no sound reasons for the support of this attitude. The same factors in competitive industry that have made for the cycles of boom, depression, and recovery in the history of business are operating at this time, perhaps in aggravated degree, in both the national and international business situation.

   Granting the accuracy of this statement, it is unreasonable to expect the individual business or industry to stabilize itself in the face of deep economic forces before which we stand helpless and unprepared. The stances of regularization on which we have until recently pinned high hopes have at no time affected as much as one per cent of the total working forces of the entire country.

   Such methods of stabilization as have been used by Proctor & Gamble, the Standard Oil Company of New Jersey, the Columbia Conserve, the Fels-Naphtha Soap, the Dennison Manufacturing, the International Harvester Company, and other concerns, have been proved by experience to be effective only under peculiar and particular conditions. Even the best business management, which in this country has reached an unprecedented state of competence and resourcefulness, can do little to control the universal forces of liquidation that are relentlessly pressing costs, prices, output, profits, and unemployment to disproportionate levels.

   We are, in our country, once more in the midst of a deep and prolonged business depression. Dr. Bryce Stewart, employment authority associated with President Hoover's Emergency Employment Committee, reports that according to one index of employment, unemployment at this time "is worse than at any time in recent years, with a drop of 35.6 pre cent for the eighteen months up to June, 1929, as compared with a decline of 28.6 per cent in the six months of the 1893-1894 depression; and 22.6 per cent in seventeen months of the 1920-1921 depression." And since June, 1929 employment indices have been falling, so that the drop today is considerably larger than 35.7 per cent.

UNEMPLOYMENT INSURANCE RECOMMENDED

   The particular "dike" which I would like to see as protection to the worker and the community and on which I wish to dwell now is unemployment insurance; although there are other dikes not to be overlooked, such as the shorter working day, the amendment of the Sherman Anti-Trust Law, and a determined resistance against wage reductions.

   In approaching the subject of unemployment insurance, I bring you to my experience as Chairman of the Board of Trustees of the New York Clothing Unemployment Fund. By collective agreement between the Amalgamated Clothing Workers of America and the Manufacturers of Men's Clothing in Chicago, Rochester, and New York, nearly 75,000 workers in this industry are affected by this fund.

   The first fund was set up in Chicago in May, 1923 and its benefits were first distributed in May,1924. Until the Spring of 1928, the fund was accumulated out of equal contributions by employers and employees, aggregating three per cent of the pay roll of the industry In May, 1928 this contribution was raised to four and a half per cent by increasing the employer's contribution to three per cent. Since its inception, unemployed workers in the Chicago men's clothing industry have received $5,341,000 in unemployment benefits. During the last slack season, beginning May 1, 1930, benefit disbursements amounted to $470,000.

   In the Summer of 1928 similar funds, amounting to one and a half per cent of the pay roll, were set up in the markets of New York City and Rochester by agreement between manufacturers and the union. Because of the great seasonal irregularity of the industry in the metropolis, payment of benefits began in New York in April, 1929, when the board, of which the writer is chairman, appropriated $75,000 for this purpose. From the outset, the trustees of the fund in New York City have distributed in unemployment benefits a total of $455,000.

   In common with all other American industries, the clothing industry has felt the effects of the sever depression of the last year. The Board of Trustees of the Rochester Fund, therefore, began the issue of benefit checks on May 1, 1930, and since then has distributed to the unemployed of the Rochester industry the sum of $113,800.

   During 1930, the unemployment funds of the markets of Chicago, Rochester, and New York City have contributed to the relief of the unemployed in the industry the sum of $1,750,000. The fact that these three funds remain solvent, even after the excessive expenditures imposed upon them by the prevailing "hard times," is eloquent testimony to the practical nature of this device which the organized clothing manufacturers and the workers' union have created for dealing with this serious and difficult industrial problem.

QUOTATIONS FROM THREE AUTHORITIES

   To buttress my conclusions that sooner or later we must all adopt some form of insurance, I wish to quote three men, all of whom have made vast contributions to our political, scientific, and judicial thinking.

    In discussing technological unemployment, Newton D. Baker says:

"The advantages and gains which come form machinery have no right to be all velvet to industry unless they are velvet to society. Industry has no right to take all the gains that come from this rigid substitution of machine process for human hands without bearing a substantial part of the consequent dislocation of the human element which it causes."

   In addressing the American Engineering Society, the world-renowned physicist, Dr. Robert A. Millikan, made the following plea:

"The catastrophe of the death of a family's breadwinner has been mitigated by insurance, which as also been extended to fire and accident. If you do not carry over this method to a greater extent than is now done to the misfortunes of sickness, old age, and unemployment, the Government will."

   Before he became a member of the Supreme Court of the United States, Louis D. Brandeis gave the following expression to an economic doctrine that is a direct challenge to our industrialists and our statesmen, many of whom content themselves with a lot of pious verbiage about protecting American institutions from "subversive" endeavor, forgetting that it is unemployment that is subversive:

"For every employee who is steady at his work there shall be steady work. The right to regularity in employment is coequal with the right to regularity in the payment of rent, in the payment of interest on bonds, in the delivery to customers of the high quality of products contracted for. No business is successfully conducted which does not perform fully the obligations incident to each of these rights. Each of these obligations is equally a fixed charge. No dividend should be paid unless each of these fixed charges has been met. The reserve to insure regularity of employment is as imperative as the reserve for depreciation; and it is equally a part of the fixed charges to make the annual contribution to that reserve. No business is socially solvent which cannot do so."


 

 

Jacob Billikopf The Life, Work, and Writings of Jacob Billikopf

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