The Assembly,
Recalling the terms of its Recommendation 25 (Doc. 103, 2nd Session) of August, 1950 requesting each Member State to be invited to submit to it a " full employment target " and certain other information concerning its domestic policy for achieving full employment and economic stability,
Noting that the Committee of Ministers transmitted this Recommendation to Member States with the request that the replies should reach the Secretariat-General before February 1st, 1951,
Wishing to draw the attention of the Committee of Ministers to the fact that by May, 1951 only nine Governments had forwarded their replies and that at the beginning of November two Governments had still not complied with the request,
Furthermore noting that only one Government, namely that of the United Kingdom, had fixed a full employment target and that several replies lacked the data necessary for assessing the economic situation in the respective countries and the general character of their domestic policies,
Referring to the replies furnished by the Mem-her States on their employment situation1 and to the conclusion based on the study of these repliesNote
Wishing to stress the following aspects of the employment situation in the Member States of the Council of Europe :
Emphasising the importance which it attaches to its Recommendation 5 of May, 1951 calling for the convocation, jointly by the Council of Europe and the O. E. E. C, of a Conference to draw up a European Agreement on Full Employment and Economic Stability, based on the findings embodied in the Report entitled " Full Employment Objectives and the Problem of European Economic Co-operation " which, by decision of the Committee of Ministers, has been transmitted for comment to the Governments of all Member States,
3. Instructs the Secretariat-General to undertake an analysis of these data in collaboration with the other International Organisations concerned, as well as with independent experts, and to report its findings to the Committee on Economic Questions.
I n its Recommendation 25 on Full Employment adopted in the course of the First Part of the 1950 Session (Doc. 103), the Consultative Assembly requested that each Government should be invited to submit to it;
" a full employment 'target' in the form of a range of unemployment or employment percentages or, alternatively, a minimum level of employment, or maximum of unemployment, which it will endeavour by all means in its power to maintain. "
It further requested that each Government should submit to the Council of Europe :
" a report on its general domestic policy for achieving full employment and economic stability, with particular reference to :
The Committee of Ministers, having accepted the Recommendation of the Assembly on Full Employment, invited the Governments of Member States to supply the Secretariat-General with the information requested above, and instructed the Secretary-General to " undertake a study of the material received and to make a compilation of it, in consultation with the other international organisations dealing with the problem, in particular with the O. E. E. C. "
It was not until April, 1951 that the Secretariat- General had received enough replies to warrant putting them in summary form. This summary was transmitted to 0. E. E. C. on 4th May, 1951 and to I. L. 0. on 9th May, 1951, 0. E. E. C. sent in its comments on 28th July, 1951, and I. L. 0. on 4th August, 1951.
Meanwhile tho Committee on Economic Questions^ at a meeting in July, 1951, had expressed the wish that the whole of these documents be submitted to the Study Group which had taken part in the drafting of the Report entitled " Full Employment Objectives in relation to the problem of European Co-operation. "
Unfortunately, it proved impossible to reassemble all the experts who had taken part in this Study Group, and the Secretariat-General was able to get into touch only with Mr. Nicholas Kaldor, Fellow of King's College, Cambridge, and Mr. Richard Downing of the International Labour Office. Their views may be found in the analysis of the replies received and the " Conclusions " of this document.
The comments of O. E. E. C. are given separately. Those of I. L. 0. have been incorporated by the Secretariat-General in the Summary itself.
(This part of the document was drafted by Mr. Kaldor and Mr. Downing).
In answer to Recommendation 25, of the 2nd Session, of the Consultative Assembly all Member States of the Council of Europe submitted replies with the exception (up to the time of writing) of the Netherlands and Iceland. The character of the replies received, however, varies greatly, and only in some cases do they deal with the nature of their employment or monetary stabilisation policies as such. In the majority of cases the replies of the Governments dwell upon the immediate prospects of their general economic situation in the near future rather than with the specific questions put in the Recommendation of the Consultative Assembly. In some cases (as, for example, in the case of the German, Italian, Greek and Turkish replies) stress is laid on the peculiar structural nature of their unemployment problem. It is only in the case of the reply of the United Kingdom and that of Luxembourg that the questions posed in the Assembly's Recommendation are answered point by point, while a few other Governments give a more general outline of their employment stabilisation policies. Most Governments regard as their main problem in the near future the maintenance of stability of prices in the face of growing inflationary pressures.
The U. K. Government fixed a figure of 3 per cent as the maximum number of persons registered as unemployed on a given day of any month of the year expressed as a percentage of the total number of employees. This figure applies to the U. K. as a whole rather than any particular region, and the percentage has been chosen in order to take into account such unavoidable unemployment as may be due to external influences and frictional and other causes. The U. K. reply also makes it clear that this figure is not to be considered as a mere warning-signal but that the Government might take positive counteraction in appropriate circumstances even before this level of unemployment is reached.
The Belgian Government mentions in its reply that frictional, seasonal and residual unemployment (the latter comprising those unemployable on account of age and physical disabilities) would in its view account for a minimum unemployment of 100,000 persons or some 4 per cent of wage-earners. It mentions also that insufficient mobility of labour, weather conditions, etc. might account for an additional unavoidable unemployment of some 50,000 persons, or another 2 per cent. While the Belgian Government's reply makes no formal commitment similar to those contained in the U. K. reply to keep the level of unemployment within definite quantitative limits, it does indicate a target of not more than some 150,000 unemployed for the coming year.
The Norwegian reply, in response to the request for a definition of a full employment target, mentions that unemployment never reached as much as 1 per cent of the total active population of Norway during the last five years, and that the Government has proposed an amendment to the Norwegian Constitution whereby the principle that every Norwegian subject has the right and the duty to earn his livelihood shall be incorporated into the Constitution. A similar principle is already embodied in the Constitution of the Grand Duchy of Luxembourg.
The French, the Swedish and the Danish Governments state that their present situation is one of full employment and that, in view of this, they do not regard it as appropriate to adopt a full employment target in the present circumstances. The Irish Government emphasises that the nature of its unemployment problem (mainly taking the form of disguised unemployment in agriculture) is such that the announcement of specific full employment targets would not serve any useful purpose in the circumstances of that country. The remaining replies do not make any reference to the adoption of a full employment target.
(a) La réponse du gouvernement du Royaume- Uni suit d'assez près la Recommandation des experts des Nations Unies. Elle voit dans l'impôt et les cotisations des assurances sociales un moyen d'agir sur le volume des dépenses et fait également allusion, à cet égard, à certaines mesures spéciales de contrôle des investissements privés et publics. Le gouvernement suédois, sans entrer dans autant de détails, fait état de mesures à long terme analogues. Le gouvernement de la Sarre fait valoir que son manque d'indépendance en matière de monnaie, régime fiscal et commerce extérieur, limite sa faculté de mener une politique indépendante de plein emploi qui lui soit propre.
(b) Tho U. K., while warmly welcoming the principle of the proposal for the adoption of automatic compensatory measures against unemployment, doubts whether in the particular case of the U. K. advanced legislation provided for automatic changes is necessarily the appropriate method, since the Government possesses at the present time various means for effectively and promptly stimulating the level of demand, should this become necessary. The Luxembourg Government mentions that, while automatic measures for offsetting shortages and surpluses have not yet been considered, there has, nevertheless, been a consistent policy of adapting the fiscal policy of the State to the needs of full employment within the framework of the annual budget.
(c) A number of Governments, without dealing explicitly with the nature of their long-torm policies, give an outline of the measures they have introduced, or propose to introduce, to deal with the problem of economic stability in the immediate future; thus, many Governments mention restrictions introduced on private investment, and the Belgian Government mentions the stimulation of an increase in imports as a means of keeping down domestic prices.
In addition to the various devices for regulating demand mentioned under (a), a number of replies emphasise the present danger to monetary stability emanating from worldwide inflationary pressures. In the case of Sweden stress is laid on additional credit restrictions, an increased budgetary surplus, the sterilisation of profits in the export industries and price controls as particular means of combating inflationary pressure. The replies of other Governments, whilst less elaborate, emphasise similar policies. Some Governments mention the raising of interest rates while others refer to the restriction of investments through building permits or the direct control of capital issues.
(d) The German Government in its reply points out that its considerable unemployment at the present time is of a structural character, in that it is due. to an occupational structure which no longer entirely corresponds with present needs, and an uneconomic geographical distribution of manpower. As regards the second, it emphasises the need for additional houses before the internal mobility of labour can be improved. It takes the view that its unemployment problem can be improved only by a gradual process.
The Italian Government in its reply regards the serious unemployment ruling in that country as of a structural character. It emphasises that this unemployment is not primarily to be attributed to " a lack of means of production and of transport facilities " except in regard to electrical power where the problem is being remedied through an extensive programme of constructing new power stations. Nor is it due, in the view of the Italian Government, to difficulties with the balance of payments or the budgetary situation or to a shortage of productive capacity, which in many cases is already excessive. The cause of unemployment in Italy, the Government considers, is especially to be sought in " the lack of balance between the country's natural resources and its active population " and also to " a lack of capital and the general characteristics of the (Italian) economic structure, inherited from the past, which retard production development. Though the specific measures taken to deal with the unemployment problem made it possible, in the view expressed in of the Italian reply, to absorb the annual increase in labour supply and even to reduce unemployment by some 300,000 (or 15 per cent) in the course of the last two years, the Government considers that the nature of the Italian unemployment problem is such that it cannot be solved by " methods at present used by other countries to achieve full employment or by steps designed to ensure better harmony between the factors affecting production. " Although the Italian reply does not actually mention emigration as a major remedy, it is evident from the nature of the reply that the Government considers mass emigration as an essential element of a solution of the problem.
The reply of the Greek Government mentions the fact that the unemployment problem in Greece becomes more serious every year with ,, the fresh supply of wage-earners coining on to the labour market. " The Turkish Government expects unemployment to increase in agriculture as a result of mechanisation, while its urban unemployment is also likely to increase as a result of the termination of E. R. P. aid. The problem of unemployment in these two countries is largely of the character of a surplus population in rural areas which cannot be integrated in urban occupations owing to the lack of industrial capacity. Unemployment is of a similar nature (i.e. clue to surplus population in agriculture) in Ireland also where, however, the GoArernment has succeeded in expanding industrial employment considerably through the expansion of productive home investment. The Irish Government considers that, while the possibility of affording increased employment lies in the industrial and commercial sphere rather than in agriculture, the maintenance of a high level of employment and of rising living standards depends in the long run on prosperity in agriculture which alone can create opportunities for enterprise and development in other fields.
(e) No country suggested that its legislative procedure, administrative organisation and statistical services were inadequate for implementing its internal economic policies. Mention should be made, however, of the fact that available data on unemployment vary in comprehensiveness and reliability and are not in general comparable between the various countries.
The Secretary-General considered this to be a point of particular importance and has thought it advisable to add, as Appendix II to the present document, a brief analysis of the statistical methods employed in the different European countries together with a few remarks on the method to be followed in order to permit comparison between them.
The Secretariat-General has also considered it advisable to draw up a general table giving the unemployment figures for the various European countries in recent years, a table which will be found in Appendix I of the present Report. In the drawing up of this table the governmental replies have been supplemented by information supplied by these same Governments on other occasions (in reply, for instance, to the Questionnaire of the Secretariat-General on the problem of refugees), and by certain official statistics published by the I. L. 0. This table is intended merely to give some indication of the approximate dimensions of the problem in the different Member States and should be considered only subject to the reservations already made.
And, finally, the Secretariat-General has endeavoured to submit, as requested by the Resolution of the Committee of Ministers, a bare synthesis of the replies received, refraining from making any observations upon the text of these replies and upon the policies followed.
Most of the replies give some indication as to the extent and causes of unemployment in the Member States of the Council of Europe before going on to outline the remedies recommended and the plans for combating unemployment which they imply.
I t being impossible, for the reasons stated above, to make a quantitative comparison, the Secretariat-General has thought it advisable to make a rough classification of the Member States according to the trend of their unemployment figures durin g the post-war period. It has seemed possible to distinguish three main groups :
Needless to say, such a classification is in essence a purely arbitrary one, and a nation like Italy, for example, can be classed in the second or third of these categories, according to whether one considers the North or the South of the country.
(a) Among the industrialised countries which are enjoying full employment may be placed Denmark, France, Luxembourg, the Saar, Sweden and the United Kingdom.
The full employment which does exist in these different countries is certainly, at least to some extent, and for some of these countries, due to a systematic policy with full employment as its main objective. But it must be noted that the French reply, for instance, makes it clear that other causes have also had their effect, first the necessity of reconstruction, and later that of re-armament.
The close relationship which is thus to be seen between the full employment in some of these countries and their re-armament effort is expressed with particular clarity in the reply from the Saar, which declares : " The Government of the Saar is aware that the maintenance of this favourable level (of employment) is closely linked with the impetus given by re-armament. "
But the impetus given by re-àrmament is far from being an unmixed blessing, above all for those countries already enjoying full employment.
The Swedish reply mentions for example that in 1950 the inflationary pressures prevailing in the world market had a powerful influence upon Swedish economy and adds : " If a country with the industrial and commercial structure of Sweden, and which has no idle productive capacity, pursues a policy of full employment at a time when inflationary tendencies are so strong in the world market, there is a serious danger of inflation. "
For these countries the present problem is not how to prepare measures to compensate for a possible depression resulting from outside circumstances, but rather to see to it that the full employment at present achieved shall not result in inflation. Sometimes, indeed, the problem is to find the manpower necessary for the dual effort of civil and military production. This potential shortage of manpower may also be accompanied by a certain frictipnal unemployment due to the conversion of certain industries for the needs of national defence, and it is also possible that the scarcity of certain raw materials in the international market may bring about unemployment in some industries dependent upon them.
((b) Among those replies received to date, the German and Italian ones seem to be particularly characteristic of the second group indicated above, the group of industrial countries experiencing unemployment.
The German Government attributes the unemployment prevalent in the Federal Republic primarily to certain causes peculiar to Germany, the large-scale destruction of industries, the dismantlings, the presence in the Federal Republic of millions of refugees, the return of demobilised soldiers and prisoners of war. But two obstacles of a more general nature make it particularly difficult to re-classify the unemployed workers : a professional structure no longer corresponding to present needs, and a faulty local distribution of manpower. Finally, the report mentions the problem of raw materials as being particularly acute. This problem is a twofold one : on the one hand, the lack of new investments contributes to the difficulties of mining certain indigenous raw materials, on the other hand, considerations connected with the balance of payments and the scarcity of certain raw materials in the international market render difficult the supplying of Germany with foreign raw materials for which it normally has a big demand.
The Italian report, for its part, brought out strongly the particular demographic conditions of Italy. The report, which quotes the figure of 1,837,000 unemployed for 1950, recalls that since 1936 the population of this country has increased by some 4 million inhabitants, which corresponds to an increase in the total volume of the potential labour market of some 3 million units.
One observation must be made here. If we are tempted to use the word over-population, it must nevertheless be noted that the notion of over-population is independent of that of population density. Some countries have very low population densities, and yet, given the insufficiency of their own resources, experience a de facto over-population. Conversely, nobody would think of calling certain industrial regions with the biggest densities in Europe over-populated. The notion of over-population has, consequently, a purely relative value and has no meaning except in relation to a certain stage of economic development and capital equipment. The Italian report itself mentions, for that matter, among the principal causes of unemployment in Italy : " the shortage of capital and the general characteristics of an economic structure, resulting from past conditions, which acts as a brake on the development of productivity. "
It would therefore be a gross over-simplification to attribute the high unemployment figures experienced by these two countries to the demographic factor alone.
(c) In the group of countries suffering from a lack of equipment may be placed Greece, Ireland and Turkey. The economy of these countries is found to be closely, and sometimes almost exclusively, dependent upon agriculture. The methods employed in the last-named, under conditions of individual family farming, are generally rather backward. These primitive economic methods bring with them a chronic condition of under-employment which the familiar methods of exploitation do not always wholly conceal; hence one generally finds in these countries a quite considerable amount of seasonal unemployment during the ' dead season. ' It might be thought that this state of affairs at least shelters these countries from that type of unemployment experienced in the more highly industrialised countries, which results from a decline in effective demand. But this is not always the case. The agriculture of some of these countries is often virtually monopolised by a single export crop, such as tobacco, with the result that, when the foreign demand drops, these countries, just like the more highly industrialised ones, are subjected to crises of over-production.
The very measures which might be proposed to remedy this state of affairs by modernising agricultural methods involve the short-term risk of causing an increase in unemployment : mechanisation is certain to liberate manpower which cannot be re-employed unless the area cultivated is increased and new crops and new industries are developed.
But, if one takes a long-term view, one may nevertheless conclude, in the words of the Report from Ireland, that in these countries the maintenance of a high level of employment and the raising of the standard of living is, in the long run, dependent upon agricultural prosperity; the possibility of increasing employment is certainly to be found in the industrial and commercial field rather than in agriculture, but the expansion of agricultural production would be exceedingly beneficial, for it would increase demand and augment the number of opportunities for enteri^rise and development in other fields. An increased volume of agricultural exports would inject into the whole economic system an increased purchasing power, and would constitute, by reason of this very fact, an essential condition for the setting up of secondary and tertiary industries likely to afford new opportunities of employment.
Needless to say, the technique employed by the different Governments to ensure full employment varies according to the different data, demographic and other, of the problems set forth above. Rather, therefore, than merely listing the different technical expedients employed, it has seemed preferable to show their use and the way in which they work, according to the particular aspects of the problem to be tackled.
It can be said, rather superficially perhaps, that for. some countries which have already reached a state of full employment, the essential problem is to reconcile it with price stabilisation. For others it is essentially a problem of capital equipment and development. Finally, in almost every case, delicate problems arise concerning the mobility of manpower.
The measures intended to combat unemployment often result in the stimulation of inflationary pressure, and, conversely, a policy of deflation is often accompanied by unemploy^ meut. The problem is not that of choosing between these two dangers, but rather of controlling the application of measures destined to ensure full employment so as not to set in motion an inflationary spiral.
If we take point by point the list of Government measures recommended by the Report of U. N. experts (paragraphs 153-164) and quoted by the Recommendation of the Assembly, it will be seen that the countries which have achieved full employment have interpreted their application in the following manner :
It is now admitted that, normally, it is the level of effective demand which determines the level of economic activity, producing a deflationary movement if it is insufficient, and resulting in an inflationary movement if it rises too rapidly.
Fiscal policy constitutes fora modern Government the principal means of assuring a satisfactory balance between effective demand, on the one hand, and the supply of consumer goods and services on the other. Thus - the need for a budget surplus in a period of inflationary pressure and for a budget deficit in a period of deflationary pressure is generally recognised—and is mentioned in particular in the British and Swedish replies.
On the other hand, modern fiscal systems have a tendency automatically to compensate for the effects of economic fluctuations. Thus the usual sharply progressive income tax corresponds not only to a desire for social justice but also plays an anti-inflationary role, such taxes skimming off an increasing share of money income according as the latter is swollen by inflation.
In the same way, in a large number of countries, the system of unemployment insurance, and in general the various social charges which are sometimes grouped under the name of security- taxation have, in addition to their social function, a stabilising role to play in the economic field. The British reply, for example, stresses the fact that in the present period of full employment the contributions paid under the heading of the National Unemployment Insurance Scheme considerably exceed the amount of benefits distributed, and that the scheme thus contributes to the reduction of inflationary pressure, just as it would contribute to the maintenance of the level of demand in the case of a depression.
A modern Government, moreover, is in a position to influence not only the level of total démand in an indirect way by its fiscal policy, but also has at its disposal methods of more direct action not only on the level of comsumption but also on that of investment.
Now, it is' a fact that, at least in those countries where full employment is assured, the present sellers' market stimulates investment : firms realising large profits are inclined to reinvest an increasingly, higher proportion of them, the more so as in many countries Governement taxation would absorb the greater part of profits if they were not re-invested. In addition, shortage of manpower conduces to rationalisation and modernisation of equipment, whilst the re-armament effort undertaken is inevitably accompanied by substantial military investments. If free play were given to all these forces, they would result, in a demand for investment goods clearly exceeding those available.
Inasmuch as this demand for investment goods is allied to the high levels of consumption resulting from full employment, it would inevitably create a strong inflationary pressure. The problem posed is therefore whether it is desirable to restrict the level of investment or that of consumption or both simultaneously. Countries like Great Britain and Denmark take simultaneous action in respect of both investment and consumption, whereas a country like Sweden, which, during and since the war has achieved a high level of investment, is.in a position to stand up to inflation without reducing its consumption.
By virtue of its increase in production France proposes to maintain investment at a level approximating to that of 1950 and simultaneously to increase its consumption without prejudicing its military effort.
But, whatever solutions may be adopted-— and they vary in relation as well to the resources of each country as to the rate of previous investment—Governments are intent not only on controlling the total level of investment, but also on laying down for them a scale of priority in accordance with certain social and political as well as economic criteria.
With regard to Government investment (and in a country like Great Britain such investment represents two fifths of the total) the Governments fix their level directly, and investment proposals held over until a later date constitute reserve plans ready to be put into immediate effect if ever the need arose to combat deflation. It must be noted, however, that while the Government may be able to take direct action in this field, some Government investments are by nature incompressible, and this fact tends to restrict the scope of Government action.
As far as private investment on the other hand is concerned the problem is two-fold. It must first of all be known what investments arc contemplated and their economic utility assessed. Thereafter it is a question of taking action to ensure that some are forbidden, whilst others are encouraged. Thus the British Government engages in a periodic examination of all investment proposals and encourages the leading industries to draw. up long-term investment plans.
In order to cope with private investments, some Governments employ a more or less rigid system of building permits, which provides a check on the volume of building for both private and industrial purposes. Restrictions on long-term credits exercised by raising the rate of interest constitute in their various forms another weapon in current use.
The British Government is one of the few Governments not to have recourse to this practice, but it has at its disposal a more effective means in the direct control which it exercises over the issue of any loan exceeding £50,000.
The Swedish Government for its part is considering the introduction of an investments tax. It has also signed an agreement with the forestry industries, by which part of the profits realised by these industries on the export markets will be blocked for a period of ten years and inflationary tendencies to that extent reduced.
Most Governments are of the opinion that they possess the necessary powers to enable them to take action in respect of the level of consumption and, even in countries like Great Britain where there exists direct rationing of consumer goods, the tendency has in recent years been to reduce the number of products rationed. Fiscal measures and, in particular, the effects mentioned above of a system of graduated and heavily increasing rates of direct taxation, together with the natural increase in prices (sometimes aggravated by the elimination of subsidies) will, in the opinion of most Governments, suffice to maintain consumption at its present level.
On the other hand, as far as raw materials are concerned, some Governments are still practising, or are obliged to reintroduce, systems of allocation for commodities such as paper pulp, steel plate and certain rare ores. Such systems of rationing may take the form of a controlled distribution by the Government or of direct agreement between the trades concerned.
There exist in most of the industrial countries of Europe plans for the maintenance of agricultural prices intended to furnish agriculture with assured markets and the minimum prices necessary for its prosperity and stability. Unfortunately, the chief agricultural countries for which such measures would be particularly desirable are not in a position to resort to this policy, precisely because of the large proportion of their national income derived from agriculture; this is particularly evident in the case of underdeveloped countries.
If in countries with full employment the chief problem at present is that of combating inflation, and consequently of closely supervising the level of investment, in countries inadequately equipped the problem is, on the contrary, one of stimulating investment. Thus the reply from Ireland mentions both various steps by which the State tends to stimulate private investment (such as State guarantees and preferential rates of taxation) and a number of investments which the State contemplates making on ts own account.
Particularly interesting from the social point of view appear to be the measures adopted by the Turkish Government to set up small local, rural and provincial industries. Such industries seem, indeed, to be the very thing for absorbing surplus agricultural manpower—without, however, uprooting it. Conversely, such local industries should enable the technical methods used by Turkish agriculture to be improved.
By the same token, despite the needs of rearmament, the Italian Government does not intend to slow down the proposed execution of public works or land settlement and improvement projects, especially in the southern part of the country. Generally speaking, of the measures which it plans to undertake, one law, known as the Fanfani plan, appears likely to absorb considerable manpower whilst at the same time helping to solve the housing problem. The plan, which aims at raising the level of employment by stimulating in particular the building of cheap housing, is financed by State contributions (thanks especially to the counterpart of Marshall credits), by compulsory contributions from employers and workers (the former provide two-thirds of the total) and by repayable annuities or rentals to be paid by beneficiaries. The technical and financial plan is worked out by " an executive committee " made up of representatives of the workers, employers and the national administrative departments concerned. These yearly plans, staggered over a period of seven years, are put into effect after receiving the approval of the Minister of Labour. Their execution is entrusted to an Administrative Council on which the various social categories and administrative bodies concerned are represented.
It is of some interest to emphasize that this law does not create a new administration or a new bureaucracy, but that the Administrative Council avails itself of the service of an already existing body, the National Insurance Institute.
To a certain extent one may consider the case of under-developed countries to be on a par with that of certain areas which, although situated in industrialised countries at present enjoying full employment, nevertheless present fairly similar problems. This is, for instance, the case in regard to what the British reply calls " special areas " or " development areas. " The reference is to areas closely dependent upon some form of industry (coal-mining for export or ship-building) whose decline has resulted in their impoverishment.
The special problems raised by such areas have long since been acknowledged by British legislation (just as Italy recognises the special problems arising in the south of the peninsula) and the Government has put into effect a whole series of measures, details of which are contained in the British Government's White Paper on the " Distribution of Industries. " The Government has endeavoured to encourage by all the means in its power the establishment of new industries in these areas, and for this reason a number of war factories were set up in those areas during the war. The factories have since been " reconverted " and are now used for peaceful ends. Special credits have been granted as well as priorities for the use of certain scarce materials. In some cases the local authorities have themselves adapted the land and put up the necessary buildings. Systematic efforts have been made to improve public utilities (water, gas, electricity, transport, etc.) in these areas, and accommodation has been provided to house the skilled workers essential to the new industries. Furthermore, the Government has set up a certain number of factories for lease on special terms to firms undertaking to employ a certain percentage (at least 50 %) of disabled men, ands ome of the factories have, in fact, been built in those areas. Lastly, and, what is perhaps not least important, a systematic advertising campaign has been undertaken to acquaint industrialists wishing to put up new factories with the often considerable natural advantages which these areas offer.
But, whether it is a special case of " deArelop-ment areas " or a general case of under-developed countries, there is no doubt that capital investments cannot always suffice and that some part of the manpower living there at present will also have to look for work in other areas or countries. The problems of all kinds, difficulties of housing and linguistic and administrative snags resulting from the movements of manpower are well-known.
This is a problem which arises in varying degrees in most European countries, and some replies from both industrialised and underdeveloped countries bring out the special advantages to be derived, particularly under present economic conditions, from all measures tending to facilitate the mobility of labour, both geographically and as between different trades. The German Government, for instance, mentions in its reply an occupational structure which no longer completely corresponds to contemporary needs and also an uneconomic geographical distribution of manpower. In order to remedy this latter state of affairs, the German Government has undertaken various measures tending to adapt the geographical distribution of labour to the post-war industrial structure. In order to facilitate the settling of workers in industrial areas with unemployed industrial capacity, it has embarked on a housing policy which resulted in 1950 in making available 350,000 accommodation units. The new buildings, it has been pointed out, have, above all, been concentrated in areas offering possibilities of permanent employment. But in almost all European countries it is still the problem of mobility between occupations that is the more acute. The need to develop export industries in some countries in order to improve a balance of payments unfavourably affected by an alteration in rates of exchange, the need to develop armament production in most countries, and the constantly increasing need for highly skilled labour impose on most European countries a large-scale policy of technical training. This need has, moreover, been generally recognised, and one Government, for instance, that of Denmark, has shown the importance which it attaches to this problem by setting up a special committee for the labour market, which has invited the co-operation of trade unions as well as that of producers.
Finally, it appears that in all countries without exception there is still to be observed— even if now in a lesser degree—the century- old general movement of population depleting the countryside in favour of the towns. The French Government mentions expressly the necessity which will be incumbent upon it to resort to immigration in order to carry out its ambitious programme of increased production. For the shortage of manpower (especially skilled manpower), from which certain States are suffering while others experience unemployment, a more extensive movement of population between the countries of the Council of Europe would certainly constitute an appreciable remedy.
There can, however, be no doubt that such movements of manpower will be inadequate to absorb existing surpluses of population and (either in their respective reports or else in their replies to other questionnaires concerning such problems as that of refugees) the Irish, German and Italian Governments emphasise the need for emigration overseas.
(This part of the Report was drafted by MM. Kaldor and Downing)
In a final analysis the following general conclusions emerged from a consideration of the replies received from Governments on the subject of full employment.
International measures for facilitating the movement of both capital and labour cannot remove the need, however, for more effective and imaginative internal policies in the field of economic development. It cannot be urged too strongly that the pace of economic development in any particular country does in the last resort depend on the vigour of policies pursued by the Governments concerned. It cannot be doubted that in this respect there are wide divergences at present between the different countries of Europe. With regard to the general problem of inflation, there also appear to be wide divergences at present in the nature and effectiveness of the internal measures to combat it which the various countries are willing to adopt. While some countries emphasise the steps they have taken to counteract inflationary tendencies, in the case of others there is too great a tendency to attribute the inflation to external causes and too little appreciation of the individual responsibility of each Government for the maintenance of its own monetary stability.
| PAYS | T Y P E S de statistique | S O U R C E | 1937 (1) | 1940 (1) | 1948 (1) | I960 (t) | 1951 (2) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Belgique | A | A Recensement | 126.000 - 182.127 | 67.300 | 129.200 | 221.700 | 199.900 | |||||||||
| Danemark | B | a | 95.600 | 51.600 | 51.600 | 54.800 | 72.100 | |||||||||
| France | C | D | a | a Recensement | 354.600 | 380.000 | 864.170 | (1936) | 15.700 | 56.600 | 16.700 | 77.800 | 52.400 | 152.900 | 52.300 | 140.300 |
| République fédérale | d'Allemagne | E | F | Bizone, b | Rép. led., a | 820.000 | 788.000 | 442.000 | 603.900 | 1.585.300 | 1.570.700 | |||||
| Grèce | Rép. du Gv. | 76.000 | 31/12 | 141.138 | 30/6 | |||||||||||
| Islande | ||||||||||||||||
| Irlande | A | D | a | a | 55.200 | (1939) | 81.800 | 35.100 | 59.700 | 35.100 | 61.200 | 30.300 | 53.400 | 33.400 | 59.300 | |
| Italie | F | a | 874.000 | 1.620.000 | 1.748.000 | (9 mois seulement) | 1.614.900 | 1.867.800 | janvier | seul | ||||||
| Luxembourg | A | a | 18 | 15 | 17 | 38 | ||||||||||
| Pays-Bas | F | a | 3G8.900 | 88.700 | 42.400 | 79.100 | 91.900 | |||||||||
| Norvège | F | a | 29.900 | 12.200 | 9.000 | 9.000 | 17.600 | |||||||||
| Sarre | G | F | a | b | 18.000 | 6.600 | 7 derniers | mois | 17.700 | 0.300 | 4.800 | |||||
| Suède | II | a | 67.400 | 27.600 | 25.700 | 22.100 | 24.400 | 4 premiers | mois | |||||||
| Turquie | ||||||||||||||||
| Royaume-Uni | F | a | 1.529.100 | 394.200 | 334.400 | 6 derniers | mois | 341.100 | 305.600 |
Nature of statistics :
Source
a : International Labour Review
h : Official National Publications
Bi-zone : U. S. Military Government Statistical Bulletin
Saar : Statistical Handbook
N.B. : These figures are merely indicative. They do not afford a basis for comparison of the returns for individual countries nor, in many cases, for different years.
The object of this Appendix is to deal in broad outline with the problem of unemployment statistics within the framework of Member States. This subject is a particularly delicate one, for although unemployment is a reality common to all countries, the definition of it given by the national statistics varies considerably from one country to another, a fact due, generally speaking, to the differing methods used to obtain the information. The first part of this review will therefore consider the various factors which preclude a satisfactory comparison between the figures obtained by individual Member States, whilst the second part will deal with the various kinds of statistics in use and their respective inherent shortcomings.