No fault of their own: Unemployment and the Canadian welfare state, 1914-1941

by James Struthers

This is book number 6 in the publisher's State and Economic Life series. The subtitle Unemployment and the Canadian Welfare State, 1914-1941. 1983, hardcover edition, University of Toronto Press, Toronto, Canada. Hardcover title, 268 pages.

268 pages, Hardcover

First published January 1, 1983

Reviews

[Danieru · Rating 3 out of 5]

Summary

        This is a study of the long and difficult process which led to the creation of Canada's first national unemployment insurance system. The author traces the origin of these difficulties to the British Poor Law reforms of 1834: unemployment was "normal" and "temporary," and help to the unemployed should not make them lose their incentive to find work (ix-x). Direct relief, the "dole," was a strictly local concern, and so the severe depression of 1913-1915 caught Canada without any comprehensive national structure to deal with unemployment. Robert Borden's Union government did take some steps to help with demobilization--as the war effort and its aftermath clearly were federal matters. The results were the Soldier Settlement scheme (settling of farm lands using ex-servicemen rather than immigrants) and the Employment Service of Canada, "a more innovative experiment. [It was] a national network of labour exchanges jointly financed and administered by the federal and provincial governments" (17). Its creation was "the most tangible evidence of a new federal commitment to tackling unemployment as an industrial, not merely as a reconstruction, problem" (19).

        However, Borden's successor, Arthur Meighen, who was no social reformer, took all possible actions to distance the federal government from the unemployed. His tactic, which was adopted by later governments, was to provide only a part of the costs of direct relief, as an "emergency measure" (27). The cities were over-crowded and things would improve if the unemployed would just move back to the land where they belong. The inter-provincial movement of the unemployed, as a transient pool of labour, increasingly gave the lie to the claim that Ottawa had no permanent role in dealing with unemployment.

        Elected in 1921, Mackenzie King, in apparent contradiction with the most (socially) liberal ideas in his book, opposed the immediate creation of an unemployment insurance scheme. He opted for decentralization, and "lost no time in cutting all of Ottawa's ties with unemployment relief" (33). He also cut funds to the ESC, thus eliminating the single source of reliable data on unemployment. The impact of his immigration policy, which contributed to the inflow of potential transient unemployed single men (one of the perceived most dangerous threat to security during the period), and his intransigence towards municipal and provincial demands "was to poison the entire atmosphere of dominion-provincial co-operation on unemployment" (39).

        When the Depression hit Canada in 1929-1930, the federal government had not taken any substancial measures to deal with unemployment. Defeated in the 1930 elections both he and his successor, R.B. Bennett, still believed that depression was temporary and a purely local matter. Any and all of Ottawa's measures towards easing the plight of municipal and provincial governments during the 1930s stemmed from the belief that they in fact had the means to act, but mismanagement and the unemployed's growing tendency to "accept dependance on the dole rather than find work" made it easier to simply ask the federal government for help. There were real cases of mismanagement, patronage and plain irresponsibility, but more and more voices (including those of the increasingly vocal professional social workers) objected that there was a very real limit to the financial capacity of the two lower levels of government to tackle the problem of unemployment in any significant way.

        Re-elected in 1935, Mackenzie King initially continued his policy of disengagement from direct relief. However, the provinces' continued financial difficulties, coupled with federal civil servants' changing perception of the role that Ottawa should play in the field of social welfare (a position articulated in the 1937 report of the National Employment Commission and later justified by the Rowell-Sirois report, published in May 1940) led to a series of measures designed to ease the burden of the unemployed (189-191). With the outbreak of WWII, Ottawa could now use its virtually unlimited spending powers to man the wartime industries, and prepare for the post-war transition to a peacetime economy. One of such measures was unemployment insurance.

Thesis

        Struthers argues that the passage of the Unemployment Insurance Act was possible for a number of reasons. First, it was clear that benefits would be proportional to the premiums paid by workers, established according to an income scale (no provision for a minimum wage or standard of living was included in the Act), thus providing an incentive to work (212). Additionally, Keneysian economics provided arguments for the takeover of the management of unemployment by the federal government; only a government has the necessary spending capacity to pull a country out of depression (212-213). Finally, the author argues that, "[i]n the final analysis it was war and not depression which destroyed the poor-law heritage" (213). It is the dual process of mobilization and demobilization, coupled with the fear of a potential post-war unrest, which pushed Mackenzie King into making a deep and permanent commitment towards the unemployed.

Contribution

        


Sources

        In addition to the relevant monographies on the subject, Struthers uses a wide variety of primary sources such as sessional papers, government reports, newspapers, private papers (including correspondence, diaries, etc.) and records of debates. Through them, he retraces the progression of the discourse on unemployment, from a time when men were unemployed "by choice" to the acceptance of federal responsibility over the unemployed.


Weaknesses