One of the most devastating economic effects of long-term structural unemployment is that a significant number of people become more or less permanently unemployed. The political effects of such unemployment, however, are complex. Consider this passage from The Road to Wigan Pier, Orwell’s 1936 study of the effects of the Great Depression on the industrial areas of northern England:
I first became aware of the unemployment problem in 1928. At that time I had just come back from Burma, where unemployment was only a word, and I had gone to Burma when I was still a boy and the post-war boom was not quite over. When I first saw unemployed men at close quarters, the thing that horrified and amazed me was to find that many of them were ashamed of being unemployed. I was very ignorant, but not so ignorant as to imagine that when the loss of foreign markets pushes two million men out of work, those two million are any more to blame than the people who draw blanks in the Calcutta Sweep. But at that time nobody cared to admit that unemployment was inevitable, because this meant admitting that it would probably continue. The middle classes were still talking about ‘lazy idle loafers on the dole’ and saying that ‘these men could all find work if they wanted to’, and naturally these opinions percolated to the working class themselves. I remember the shock of astonishment it gave me, when I first mingled with tramps and beggars, to find that a fair proportion, perhaps a quarter, of these beings whom I had been taught to regard as cynical parasites, were decent young miners and cotton-workers gazing at their destiny with the same sort of dumb amazement as an animal in a trap. They simply could not understand what was happening to them. They had been brought up to work, and behold! it seemed as if they were never going to have the chance of working again. In their circumstances it was inevitable, at first, that they should be haunted by a feeling of personal degradation. That was the attitude towards unemployment in those days: it was a disaster which happened to you as an individual and for which you were to blame.
When a quarter of a million miners are unemployed, it is part of the order of things that Alf Smith, a miner living in the back streets of Newcastle, should be out of work. Alf Smith is merely one of the quarter million, a statistical unit. But no human being finds it easy to regard himself as a statistical unit. So long as Bert Jones across the street is still at work, Alf Smith is bound to feel himself dishonoured and a failure. Hence that frightful feeling of impotence and despair which is almost the worst evil of unemployment–far worse than any hardship, worsethan the demoralization of enforced idleness, and Only less bad than the physical degeneracy of Alf Smith’s children, born on the P.A.C. Everyone who saw Greenwood’s play Love on the Dole must remember that dreadful moment when the poor, good, stupid working man beats on the table and cries out, ‘O God, send me some work!’ This was not dramatic exaggeration, it was a touch from life. That cry must have been uttered, in almost those words, in tens of thousands, perhaps hundreds of thousands of English homes, during the past fifteen years.
But, I think not again–or at least, not so often. That is the real point: people are ceasing to kick against the pricks. After all, even the middle classes–yes, even the bridge clubs in the country towns–are beginning to realize that there is such a thing as unemployment. The ‘My dear, I don’t believe in all this nonsense about unemployment. Why, only last week we wanted a man to weed the garden, and we simply couldn’t get one. They don’t want to work, that’s all it is!’ which you heard at every decent tea-table five years ago, is growing perceptibly less frequent. As for the working class themselves, they have gained immensely in economic knowledge. I believe that the Daily Worker has accomplished a great deal here: its influence is out of all proportion to its circulation. But in any case they have had their lesson well rubbed into them, not only because unemployment is so widespread but because it has lasted so long. When people live on the dole for years at a time they grow used to it, and drawing the dole, though it remains unpleasant, ceases to be shameful. Thus the old, independent, workhouse-fearing tradition is undermined, just as the ancient fear of debt is undermined by the hire-purchase system. In the back streets of Wigan and Barnsley I saw every kind of privation, but I probably saw much less conscious misery than I should have seen ten years ago. The people have at any rate grasped that unemployment is a thing they cannot help. It is not only Alf Smith who is out of work now; Bert Jones is out of work as well, and both of them have been ‘out’ for years. It makes a great deal of difference when things are the same for everybody.
It is of course true that in America today there is many a decent tea table where one still hears quite a bit about lazy idlers on the dole. Consider the reaction of Rep. John Linder (R-GA) to the fact that approximately six million Americans (one in fifty people) report having no other income than food stamps:
“This is craziness,” said Representative John Linder, a Georgia Republican who is the ranking minority member of a House panel on welfare policy. “We’re at risk of creating an entire class of people, a subset of people, just comfortable getting by living off the government.”
Mr. Linder added: “You don’t improve the economy by paying people to sit around and not work. You improve the economy by lowering taxes” so small businesses will create more jobs.
Given that the linked NYT story reports that a typical food stamp benefit for an adult couple is $300 a month, it is just possible that Rep. Linder is exaggerating the risks that our idle poor are becoming too comfortable living on this stipend. Indeed Rep. Linder might be surprised to discover, as I was, that welfare benefits in America today are actually less generous than they were in Depression-era England.
Now that, thanks to in large part to the previous Democratic administration, welfare has been “ended as we know (or rather knew) it,” millions of the long-term unemployed are not eligible for any government cash assistance besides food stamps. By contrast, in England in the 1930s, the long-term unemployed lived on what was known colloquially as “the dole.” In 1936, the dole for an adult couple was 23 shillings a week. This was the equivalent of approximately seven dollars — a figure which I suspect does not sound overly munificent even to Rep. Linder. But inflation is a tricky thing. In 1936 seven dollars per week were equivalent to about $110 in present money, i.e. just under $500 a month. It appears that, for the long-term unemployed, life on the dole in England 75 years ago was, in absolute terms, quite a bit more generous than it is in America today. But in relative terms, this comparison is considerably more startling.
In 1936, England had a per capita GDP of about $7800 in present dollars. Per capita GDP in America today is about $47,200. We are six times richer than Orwell’s England, yet our dole is about 50% less. Now to be fair, as the Heritage Foundation never tires of pointing out, you couldn’t buy a cell phone plan or an HDTV in England 75 years ago. That is some compensation to what I suspect Rep. Linder and his friends at Heritage like to think of (and to refer to in suitably unmixed company) as “the so-called ‘poor.'”