Economic Development in Denmark Before and During the World War/Care of Unemployed

Care of Unemployed

Here is a problem which was little known in the days of the guilds. Unemployment during their journeys was an established feature of the training of the journeymen; it was a pleasant time in their lives, which they might sometime look back upon with pleasure. Outside the fixed frames of society there were, indeed, not a few vagrants and idlers; but they were scarcely more numerous in proportion to the population than they are to-day, except in troubled times when war or other disasters had devastated the land. To a great extent private charity took care of such people then, just as it does now.

But under the modern tendency toward specialization, which apportions to each man his occupation and to each trade its field, that is to say, under the increasing industrialization of the community, a reserve army of the unemployed is a natural and unavoidable development. It will vary in size according to the pressure of business, but it will always be large enough to claim attention, even though it does not include vagrants and persons unable to work. Since almost all the activity of the community has now been massed, the individual elements which perhaps found it just as difficult to get along before now come to form a more or less compact body which lays its claims before society.

For a long time the trade unions included labour exchange and support of the unemployed in their programmes. Because of their aggressive attitude, however, they were less able to secure government recognition and support for this work, since they gave 'unemployment support' not only to their members who were out of work, but also to those who were out on strike. It is natural, therefore, that employers always looked askance on labour exchange as practised by trade unions. In this respect German social policy also had no great achievement to boast of. The leading legislators in Germany were not in favour of unemployment insurance as it had been practised in Switzerland, for instance, in Berne, or in Belgium under the so-called Ghent system. Various proposals were made, to be sure, as, for instance, that of compulsory savings from wages for the support of the unemployed; but on the whole attention was concentrated on labour exchange. In not a few places municipalities or philanthropic societies established employment offices governed jointly by employers and employees; and under the stress of the World War centralized efforts were made as the various countries imposed the establishment of these offices on their municipalities.

All this activity in the field of unemployment insurance furnishes proof of the independent development of social ideas. Adam Smith and Turgot announced the principle of man's right to work, and they built upon it. They set forth as a prime necessity the abolition of all trade restrictions, so that all men might use their powers as they thought fit. But the working classes insisted more and more urgently that work should be assigned by the state. That the attempt made in France, in 1848, to carry out Louis Blanc's ideas of the right to work failed, was no great misfortune; in truth, it was not even loyally supported. But the claim increased in urgency, until in the eyes of many people it came to represent the prime right of man; At the close of the last century the social-democrats of Switzerland undertook to solve the problem by a referendum, but they were unsuccessful. The Unemployment Insurance Fund established in Berne in 1893 was one of the results of their agitation, however, and from that time on the question of unemployment had its place on the order of the day in all countries. To procure work might be extremely difficult, not to say impossible, even though many municipalities in hard times made great efforts to start some new enterprise, as was the case in many English towns toward the close of the last century; but the workmen had a clear right to exist, even when unemployed.

It was in Norway and Denmark that the first great step was taken in this direction. Denmark was better prepared for it through the previous development of legislation; but Norway was a little quicker and came out a length ahead. In Denmark it devolved upon the above-mentioned Committee on Invalidism of 1903 to consider this question, which naturally had to be solved in conformity with existing laws. The Friendly Societies act was a good model. If a neutral unemployment society could be established, the community might support it as well as the friendly societies; for the sick and the unemployed have an equal claim to help to self-help. And what was quite as important for Denmark, the very man to bring about such a result was in the present committee, namely, the above-mentioned Mr. Th. Sörensen, Inspector for Friendly Societies, who had played so notable a part in carrying through the former act. He could count on the support and confidence of all the people in the community with whose representatives he would be called upon to work.

The Norwegian act, passed in 1906, provided that government grants should be made to voluntary unemployment funds on the sole condition that no support should be given in cases of strikes or lock-outs. At first the project met with little sympathy; even the workmen looked upon it with suspicion, which disappeared or was overcome very slowly, and only after the act had been amended. This suspicion did not exist in Denmark; and after the act recognizing unemployment societies was passed, on April 9, 1907 (amended by a subsequent act of April 8, 1914), it was not long before a considerable number of societies applied for government recognition.

The Danish act asserted that unemployment societies must have but one object, namely, to insure their members against the consequences of unemployment. They must be neutral; they must not be used to aid strikes or to support persons whose want of employment is self-occasioned, or who refuse to accept work assigned to them by the Board of the Society or a municipal employment office. Although the societies are neutral, they are generally managed by persons who are the leaders of the trade unions. The inspection is on the whole managed as in the case of the friendly societies. The funds are derived partly from the subscriptions of the members, partly from government grants and voluntary or obligatory subventions from the municipality. According to the act of 1914 the government is bound to pay one-half of the total sum subscribed by the members. It is also authorized to make a grant to any Emergency Fund that may be established to give support under extraordinary conditions of unemployment; and if such a fund is established, the municipality is likewise bound to make contributions to it.

The right to this support is conditional. The applicant must have been a member of the society and have paid subscriptions during the preceding twelve months; further, he must have passed through a certain number of days of unemployment. The daily support allowance is limited to between half a krone ($0.13) and two kroner ($0.54), and, at the most, to two-thirds of the applicant's ordinary working wage.

The societies appoint delegates who meet once a year to discuss their activity and co-operation. In the support of the cause, the law further provides a council composed of the Inspector, two members appointed by the Folketing and two by the Landsting, besides six members elected by the delegates of the unemployment societies. This council serves as an intermediary between the various societies; its duties are to establish rules for the transfer of members from one society to another, to endeavour to homogenize the rules for granting aid and to present the case when one of the societies ought no longer to be recognized. As is the case with the friendly societies, a council of this kind contributes to no small extent to the growth of the unemployment funds by inspiring the working classes with confidence and securing their co-operation. The increase in the number of members has been considerable. On March 31, 1918, there were sixty-two recognized societies with 221,000 members, whose subscriptions during the year 1917-1918 amounted to 2,400,000 kroner. The state ordinarily contributed 1,000,000 kroner, but owing to the high cost of living, it increased the amount to 3,100,000 kroner. The municipality contributed 700,000 kroner. Most of the grants were for 'day-money'; comparatively small amounts were given for journeys, removals, or food. A sum of 144,000 kroner was set aside for the above-mentioned Emergency Fund.

By the passage of this act Denmark contributed a great deal, as has been said, toward the general solution of this great problem. In 1911 came the great British reform based on the principle of compulsory contributions; but it was naturally hampered by the developments of the war. The war also interfered with the movement in Denmark and prevented voluntary unemployment funds from becoming the great lever in social reform that they might have been. If it had been possible for the movement to develop quietly under the favourable conditions which had prevailed in Denmark at the beginning of this century, there is no doubt that this branch of social insurance would have received much greater sympathy from all classes of society.