UNEMPLOYMENT. - This is understood as the condition of a worker who, against his will, finds himself without remunerated employment. The phenomenon assumes the importance of a social problem in the modern age, particularly in industrial countries organized according to a market economy.
The generic term may be usefully specified by distinguishing: 1) normal or basic unemployment, consisting of workers who have left a previous position and have not yet found another suitable one, and of workers who do not possess the qualifications required for work still available. For individuals it is temporary in character; taken as a whole, it forms a kind of labour reserve which does not fall below a certain level even at times of the strongest demand for workers. 2) Seasonal unemployment, characteristic of certain activities carried on intermittently over time (e.g., construction, agricultural day labour). 3) Technical unemployment, connected with changes in the technical means of production, which permit a different combination of capital and labour by replacing manpower with mechanical means. Usually this form of unemployment is temporary in character. 4) Cyclical unemployment, connected with the cyclical phases of expansion and depression in productive activity which have assumed particular importance since the First World War in countries under a capitalist system. In periods of depression, the community employs in investments less than it saves, leaving capital goods and labour forces unused. 5) Structural unemployment, of a permanent character, occurring in countries where, in comparison with the available labour force, there is a lack of capital goods to which it may be applied. It may be connected with population growth more rapid than that of income, and hence with insufficient formation of savings and productive investments.
From this enumeration it is apparent that the causes of the persistence of serious unemployment are many.
In addition to the circumstances indicated above, it may depend upon a defective distribution of labour, connected with ignorance concerning the demand for labour in the various sectors and with the costs of transfer; it may also depend upon excessive wage rigidity, characteristic of areas where trade-union organization is very strong and which, under a market regime, limits employment opportunities. In this case, the maintenance of a high level of wages may result in lower employment.
Finally, it must not be forgotten that the gravity of the phenomenon in the present period is accentuated by the
Moreover, 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 extremely serious, both from the economic-social and the political point of view, as well as for the individual who suffers II.
In particular: 1) It constitutes a waste of labour ძალ, and therefore affects the income of communities. 2) It weighs upon the worker as a continual threat and often confirms his inferior position in relation to the other economic agents. 3) It is the basis of pauperism in modern society, since it systematically affects certain groups, whose precarious employment and earnings prevent their social and economic advancement, keeping them on the margins of productive life. 4) It is an element of social instability, since it intensifies distrust in the economic system that tolerates it and impels people toward solutions subversive of that system itself. 5) It burdens the community with ever more serious welfare costs. 6) It undermines family stability, compelling women and children to work in order to supplement, or sometimes entirely replace, the lost earnings of the unemployed head of household. 7) It is one of the most dangerous forces of miseducation and demoralization active in modern society. While it offends the dignity of the worker, abandoned to the consequences of not merely material poverty, it detaches him from every constructive interest in relation to society, toward which the unemployed person often
feels himself to be the victim of an injustice. The enterprise in which he may occasionally find work no longer interests him except for the incidental wage; thus there is accentuated that deep estrangement between worker and enterprise which today characterizes, for other reasons as well, the difficult relations between employers and workers.
The problem of unemployment has long occupied sociologists and economists and has coloured the concerns of politicians. Especially during the last decade, in the face of the consequences of the war and of the solutions, however debatable, adopted in countries with controlled economies, programmes have been formulated in England and the United States of America, commonly known under the designation of “full employment.”
Such programmes usually refer to countries in which unemployment depends not so much on a shortage of capital and natural goods as on defects in the functioning of the economic mechanism. They are based on State action aimed at maintaining productive investments constantly at the level required to achieve total employment. This result may be obtained, according to circumstances, by encouraging private enterprises, through monetary policy, or through public investment.
More difficult is the solution for countries where unemployment is chronic and depends essentially on a lack of savings and on the poverty of the environment.
Emergency measures—compulsory hiring quotas, prohibitions on the use of machinery, limitations on working hours, and the like—even if they sometimes appear inevitable, do not succeed in permanently absorbing unemployed workers and may aggravate the problem in the future. It has no definitive solution except in an increase in the efficiency of labour and in an increase in income and in the portion of it saved for productive investment. Where this is not possible, the transfer of surplus labour forces to areas where they are lacking is inevitable.
Whatever solution is chosen, the State has among its duties that of facilitating II. Through reclamation works and the development of any natural resources not adequately utilized, also because they are temporarily unprofitable for private initiative, the State must create new employment opportunities; or, failing this possibility, it must undertake assistance for the unemployed, even if such action entails a redistribution of income. Such assistance is now normally carried out through the development of compulsory insurance schemes.
It should be noted that public intervention is extremely delicate, because if excessive it may bring about a decline in the total income of the community. The natural means of providing the State with the resources necessary for this purpose is taxation, while recognizing, however, that it must not be such as to discourage savings and their productive investment. In exceptional cases, and when private interests conflict with the utilization of natural factors more favourable to a permanently greater employment of workers, limitations may be imposed upon the right of property: this is the case of agrarian reforms intended for a better utilization of landed resources.
The liberal solution, which expects unemployment to be absorbed through the natural movements of the market, is utopian under the present conditions of economic and social organization, because it presupposes a perfect mobility of the factors of production—a mobility that exists only partially—and disregards the grave suffering to which broad sectors of the population are forced to submit.
The worsening of the problem of unemployment could go so far as to impose, on the political and economic level, more radical solutions, such as the concentration of the means of production in the hands of the State, were the State itself not to assume the task of confronting the social consequences of unemployment. When, moreover, the phenomenon of unemployment reaches exceptional proportions and assumes a permanent character in a given country, it can have no stable solution except through international agreements aimed at facilitating the movement of workers from one country to another and the influx of capital to develop those labor forces that could be employed in new locations.
This solution is of particular interest to Italy, where unemployment is largely structural in character: in fact, in an environment that is naturally poor and already densely populated, population growth is more rapid than the growth of savings necessary to employ the labor forces that gradually become available; these are estimated at 200,000 persons annually.
Before 1914, this increase was partly absorbed by emigration; subsequently, once the pace of emigration had slowed, and despite the considerable expansion of production, the number of unemployed remained consistently high and, in the period 1936–39, reached an average of 700,000.
At the end of 1947, the unemployed numbered 1,778,820. This figure is higher than the actual number if it refers to totally unemployed workers; it nevertheless indicates a serious situation, all the more so because very many workers have only partial and intermittent employment, while in many sectors the number of workers employed exceeds the limits of an economically efficient combination with the other factors of production.
The considerations relating to structural unemployment, the need for State intervention and international agreements aimed at developing colonization in territories not yet open to adequate exploitation and at assisting emigration apply particularly to Italian unemployment.