Unemployment

Unemployment. America has always known unemployment although definitions of the term “out of work” have varied, depending on such factors as individual inclination and seasonality, as well as geographical, occupational, and social‐mobility considerations. From its colonial origins until the late nineteenth century, when the United States was mainly agricultural, unemployed people generally relied on other resources for sustenance, such as gardening, hunting, or household contract work. Consequently, poor laws, laissez‐faire ideology, and social Darwinist notions all assumed that any individual should and could be able to provide for his or her own living.

The acceleration of industrialization after the Civil War rendered this assumption questionable. As wage labor became the predominant form of employment and the labor force swelled through large‐scale immigration, workers thrown out of work in periods of industrial depression could no longer be expected to manage for themselves. But because of the novelty of widespread unemployment and the public's unwillingness to assume an obligation to the jobless, two generations passed before Americans recognized unemployment as a societal responsibility and agreed on remedial responses. The inadequacy of private poor relief induced a growing number of Progressive Era reformers, especially those in the American Association for Labor Legislation led by William M. Leiserson and John B. Andrews, to call for government involvement. Slowly, several state governments as well as the federal government, drawing on English and German models, began to gather statistics on the out of work, to furnish them with job information through public employment‐agencies, to employ them on public works projects, and to debate the merits of unemployment insurance.

The Depression of the 1930s stimulated more substantial initiatives. The Social Security Act of 1935 established a joint federal‐state scheme of unemployment insurance, administered in conjunction with a network of public employment agencies and, as a welcome by‐product, at last made available reliable unemployment figures. Other New Deal measures implemented a huge public works program to provide paid work for the masses of unemployed—by some counts up to one‐third of the labor force in 1933.

The Employment Act of 1946 acknowledged the government's obligation to assist job‐seekers. By then, also, all states had passed unemployment compensation laws. But the states controlled the tax rates paid by employers to fund insurance, and their programs lacked uniformity. During a recessionary period in 1959, for example, several states had to borrow money from the federal government to make their unemployment payments, whereas other states ran large surpluses. Nonetheless, suggestions that the federal government take full responsibility for the system were rejected. Most people apparently felt that the system satisfactorily fulfilled its two‐fold task: to alleviate individual need and to soften economic downturns by sustaining purchasing power. Whereas in the worst depression years of 1894 and 1933 an estimated 18 and 25 percent, respectively, of the labor force had been out of work, after 1940 the rate never exceeded 10.8 percent, a high it briefly reached in 1982. The character of unemployment also changed with the composition of the labor force, so that by the end of the twentieth century women as well as men fed the ranks of the out of work.
See also Depressions, Economic; Labor Markets; Labor Movements; New Deal Era, The; Poverty; Social Darwinism; Welfare, Federal; Women in the Labor Force.

Bibliography

Edward D. Berkowitz , America's Welfare State from Roosevelt to Reagan, 1991.
Udo Sautter , Three Cheers for the Unemployed: Government and Unemployment before the New Deal, 1991.

Udo Sautter