Two Depressions: Bennett, Trudeau and the Unemployed

Two Depressions: Bennett, Trudeau and the Unemployed JAMES STRUTHERS Recent changes in Canada's unemployment insurance programme seem to defy logic and common sense. At a time when unemployment has reached a level unprecedented since the Great Depression, the government is reducing benefits and stiffening eligibility requirements. "Do you know what this means," Toronto's chairman points out. "It means we'll have 2,500 more people a month looking for money at the worst possible time of the year - a time when virtually all seasonal workers are out of a job."1 . Why is the federal government cutting its support to the unemployed precisely when the problem has reached critical proportions? Why, as Paul Godfrey accurately observes, is it "shifting the burden...to the provinces and municipalities "?2 The prime minister claims the cuts are justified because the unemployed have become ''too fussy about what jobs they'll take, "3 a simplified version of the Economic Council of Canada's argument that unemployment insurance itself has "increase[d] the incentive to be unemployed or remain unemployed."4 But is the unemployment insurance programme itself to blame for our record level of joblessness? Are the unemployed themselves the authors of their plight? One way of finding an answer and clarifying much of the current confusion over whether unemployment is real or "insurance-induced"S is to examine how another prime minister treated the unemployed during our last great economic crisis - the Depression of the 1930s. That was the decade which produced our original unemployment insurance programme. It was also the decade in which many of the current contradictions surrounding unemployment policy in a market society first became apparent. We usually think the Depression produced a 70 straightforward, clearcut unemployment problem. Surely if ever there was a time Canadians could agree that the unemployed were out of work through no fault of their own it was in 1933 when the jobless rate reached the record level of almost 30%.6 Yet, as will be shown later, such was not the case. To understand why first requires an understanding of what the Depression meant in social as well as economic terms. Between 1926 and 1929 the Canadian economy and the Canadian labour force expanded at a phenomenal rate. During these three years 537,OOO people entered the work force for the first time, expanding it by twenty-five percent.7 Most of this growth occurred within cities, which absorbed seventy-seven percent of Canada's population increase during the 1920s. While agricultural income between 1926 and 1929 remained about the same, manufacturing, mining and construction income grew by 30%, 35% and 45% respectively .a In short, the creation of high-paying jobs, particularly in the durable goods industries, attracted hundreds of thousands of new workers into Canada's cities during the second half of the 1920s. Most came from the countryside or abroad. Another large proportion were women.9 For all of them, the entry into urban, wage-paying occupations was a form of social mobility, especially since the five years before 1926 were characterized by high unemployment.lo Farm labourers got factory jobs for the first time; women moved out of the household into wage-paying occupations, and hundreds of thousands of immigrants rejected the lure of the "last, best West" for the more lucrative attractions of city living. By 1931 their hopes had been shattered. Between 1929 and that year, the volume of employment contracted by exactly twenty-five percent and by 1933 it had shrunk by thirty-two percent, while national income as a whole was forty percent below 1929 levels.II In large part, the first to be thrown out of work by this collapse were those with the most tenuous attachment to the labour market, that is, those who got their jobs after 1926. Their numbers swelled rapidly. By January 1933, 718,000 were without workt2 and all govern- .ments, as well as the unemployed themselves, Revue d'etudes canadiennes Vo). 14, No. I (Printemps 1979 Spring) were faced with an agonizing moral dilemma. Did those who had entered the labour force for the first time in the late twenties have the right to work? Almost 300...