UNEMPLOYMENT. - This means the condition of the worker who, against his will, finds himself without remunerative occupation. The phenomenon assumes the importance of a social problem in the modern age, particularly in the industrial countries organized on a market economy.
The generic term can be suitably specified by distinguishing: 1) normal or underlying unemployment, consisting of workers who have abandoned a previous position and have not yet found another adequate one, and of workers who do not have the requisites required for the work still available. For individuals it has a temporary character; as a whole it forms a kind of labor reserve that does not fall below a certain level even in moments of the strongest demand for workers. 2) Seasonal unemployment, characteristic of certain activities that are carried on intermittently over time (e.g., construction, agricultural day labor). 3) Technical unemployment connected with transformations of the technical instruments of production, which permit a different combination of capital and labor, replacing manpower with mechanical means. Usually this form of unemployment has a temporary character. 4) Cyclical unemployment, connected with the cyclical phases of expansion and depression of productive activity that have taken on particular importance starting from the First World War in countries with a capitalist regime. In moments of depression the community employs in investments less than it saves, leaving instrumental goods and labor forces unused. 5) Structural unemployment, of a permanent character, which occurs in countries where, in comparison with the available labor forces, instrumental goods to which to apply them are lacking. It can be connected with a development of the population more rapid than that of income, and therefore with an insufficient formation of savings and productive investments.
From the enumeration made it results that the causes of the persistence of a strong unemployment are manifold.
Besides the circumstances indicated above, it can depend on a defective distribution of labor, connected with ignorance regarding the demand for labor in the various sectors, and with the costs of transfer; it can also depend on an excessive rigidity of wages, characteristic of zones where trade-union organization is very strong, and which, in a market regime, limits the opportunities for work. In this case the maintenance of a high level of wages can translate into lower employment.
Finally, one must not forget that the gravity of the phenomenon in the present period is accentuated by the obstacles of various kinds that in the last fifty years have increasingly hindered the movements of persons, goods, services and capital between country and country.
On the other hand, the very rigidity of the capitalist system in its modern form, far removed from the ideal market economy, makes adequate solutions difficult without the intervention of the State or of the States concerned; this fact complicates the economic-social problem with difficult political questions.
The effects of unemployment are very serious, both from the economic-social point of view and from the political one, as well as for the individual who suffers it.
In particular: 1) It constitutes a waste of labor forces and therefore affects the income of communities. 2) It weighs as a continuous threat on the worker and often confirms his inferiority with respect to the other economic operators. 3) It is the basis of pauperism in modern society, in that it strikes in a systematic way certain groups, to which the precariousness of work and earnings prevents social and economic advancement, keeping them on the margins of productive life. 4) It is an element of social instability, in that it exasperates distrust in the economic system that tolerates it, and pushes toward solutions subversive of that system itself. 5) It weighs on the community with ever more serious assistance burdens. 6) It disintegrates family solidity, forcing women and children to work, in order to supplement or sometimes totally replace the lost earnings of the unemployed head of the family. 7) It is one of the most dangerous forces of miseducation and demoralization operating in modern society. While it offends the dignity of the worker, abandoned to the consequences of not only material misery, it detaches him from every constructive interest with regard to society, toward which the unemployed man often feels himself the victim of an injustice. The enterprise in which he can occasionally find work no longer interests him except for the occasional earnings; thus that strong detachment between worker and enterprise is accentuated which characterizes today, also for other reasons, the difficult relations between employers and workers.
The problem of unemployment has long wearied sociologists and economists, and pervades the concerns of politicians. Especially in the last decade, in the face of the consequences of the war and of the solutions, albeit debatable, given in the countries with a controlled economy, programs have been formulated, in England and in the United States of America, known under the current designation of "full employment."
Such programs usually refer to countries in which unemployment depends not so much on a lack of instrumental and natural goods as on defects in the functioning of the economic mechanism. They are based on an action of the State, tending to maintain, constantly, productive investments at the level required to achieve total employment. This result can be obtained, according to circumstances, by encouraging private enterprises, by monetary maneuvering, by public investments.
More difficult is the solution for the countries where unemployment has a chronic character and depends essentially on a lack of savings and on the poverty of the environment.
Emergency solutions, a levy on manpower, prohibitions on the use of machines, limitations on working hours, and similar measures, even if they sometimes present themselves as inevitable, do not achieve the goal of permanently absorbing the unemployed workers, and can aggravate the problem for the future. It has no definitive solution except in the increase of the efficiency of labor and in the increase of income and of the share of it saved for productive investments. When this is not possible, the transfer of the surplus labor forces to zones where they are lacking is inevitable.
Whatever the solution to be chosen, the State has among its tasks that of facilitating it. With works of reclamation and of development of possible natural resources not adequately utilized, also because temporarily not remunerative for private initiative, the State must create new opportunities for work; or, in the absence of this possibility, it must assume the assistance of the unemployed, even if this action implies a redistribution of income. Such assistance is today normally carried out with the development of insurance forms of a compulsory character.
It must be noted that public intervention is extremely delicate because, if excessive, it can determine a decline in the total income of the community. The natural way to give the State the means necessary for the purpose is the fiscal one, bearing in mind however that it must not be such as to mortify savings and their productive investment. In exceptional cases, and when the interest of private individuals conflicts with the utilization of natural factors most favorable to a permanent greater employment of workers, limitations on the right of property can be imposed: this is the case of agrarian reforms intended for a better utilization of landed property.
The liberal-type solution, which expects the absorption of unemployment through the natural movements of the market, is utopian under the present conditions of socio-economic organization, because it presupposes a perfect mobility of the factors of production — a mobility that exists only partially — and it disregards the grave sufferings to which broad strata of the population are compelled to submit.
The worsening of the problem of unemployment could reach the point of imposing, on the political and economic plane, more radical solutions, such as the concentration of the means of production in the hands of the State, if the State itself did not assume the task of confronting the social consequences of unemployment. When, moreover, the phenomenon of unemployment reaches exceptional proportions and has a permanent character in a given country, it cannot have a stable solution except through international agreements, tending to favor the movement of workers from one country to another and the influx of capital to develop those labor forces that could be utilized in new locations.
This solution particularly concerns Italy, where unemployment is largely structural in character: indeed, in a naturally poor and already densely populated environment, there is a development of the population more rapid than that of the savings necessary to employ the labor forces that become available from time to time: they are estimated annually at 200 thousand units.
Before 1914, this increase was absorbed in part by emigration; subsequently, with the pace of emigration slowed and despite the notable expansion of production, the number of the unemployed always remained high and in the period 1936-39 it touched an average of 700 thousand units.
At the end of 1947 the unemployed amounted to 1,778,820. A figure higher than the truth, if it is referred to the number of totally unemployed workers; but it is in any case a symptom of a grave situation, all the more so since very many workers have only partial and intermittent employment, while in many sectors the number of workers employed exceeds the limits of an economical combination with the other productive factors.
To Italian unemployment there apply in particular the considerations relating to structural unemployment, on the necessity of State intervention and of international agreements, tending to the development of colonization in territories not yet open to adequate exploitation and to assistance for emigration.