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War Economy

Men Not Wanted

Men Not Wanted

WHEN Prime Minister Michael Joseph Savage attended the 1937 Imperial Conference and declared that the causes of war were economic, New Zealand was hardly out of the throes of bitterness generated by the great economic depression of the thirties.

It is probable that memory of the depression was the strongest influence leading to the overthrow of the Coalition Government at the 1935 general election and its replacement by Savage's Labour Government.

Even in 1935, two years after the worst year of the depression, the economy was unable without Government assistance to employ more than eighty-nine out of every hundred men. Eleven in every hundred in the labour force were wholly or partly a charge on the Unemployment Fund. Against this background Savage's Labour Party offered a forceful policy for expansion of production. It was a strongly socialistic policy containing much which was repulsive to many in a predominantly private enterprise economy; but it convincingly promised a determined attack on the sickening spectacle of continued large-scale unemployment. It swept the party into power.

Actually, unemployment had shown quite a strong falling tendency before Labour took office, but this tendency was accelerated in the following two years. The numbers of men wholly or partly a charge on the Fund had fallen from an average of fourteen in every hundred of the labour force in 1933 to twelve in 1934 and to eleven in 1935. In December of that year the Government changed page 5 and, in the first two years of Labour administration, the fall continued, to reach nine in every hundred in 1936.1 By 1937 it was nearly as low as six.

This was the position when Savage went to the Imperial Conference in 1937—rather more than 6 per cent of unemployment or assisted employment, well under half of the 1933 level, but still considerably above the New Zealand long-term average.

In the next two years there was a distinct danger that the tide of improvement would ebb. In 1938 the numbers who were wholly or partly a charge on the Employment Promotion Fund decreased only insignificantly. There was, however, a considerable increase in the proportion who were working full time in industry with assistance from the Fund, accompanied by a corresponding decrease in numbers on rationed work or sustenance without work.

In 1936 the new Labour Government had emphasised its more positive outlook on employment problems by passing the Employment Promotion Act 1936, to supersede the Unemployment Act 1930. Administration passed from the Unemployment Board to the Employment Division of the Department of Labour which was, in time of war, to become the National Service Department. Emphasis was to be on the permanent extension of employment avenues rather than on temporary relief.

In 1939 a further major step was taken with the merging of the Employment Promotion Fund into the Social Security Fund, in terms of the Social Security Act 1938. This was illustrative of the central place which Labour gave to welfare policy and the tendency to bring together as far as possible for co-ordinated attention the widening range of Government provisions for people with special needs or responsibilities.

With the 1939 change the nature of unemployment benefits also changed and the sequence in these statistics was lost. The new series of information showed comparative stability into 1940, but in September 1939 war came. Its demands for men for the armed forces were soon to alter the whole outlook on manpower. According to the National Service Department,2 New Zealand entered the war with 19,000 men on unemployment benefit or in subsidised work.

page 6

Chart 1 shows changes in numbers receiving various types of unemployment assistance.

chart of employment statistics

Chart 1

1 Answering a question about the number on unemployment relief, Minister of Labour H. T. Armstrong said in April 1936:

‘These are the latest available figures up to the 14th March last: Under Scheme Number 5, rationed relief, 15,704; on sustenance, 14,443; gold prospecting, 2,328; afforestation, 1,005; farm subsidy schemes, 3,117; Public Works - roads, aerodromes, etc. - 8,435; local bodies - subsidised employment - 2,831; small farms development, 1,257; miscellaneous, 3,537; a total of 52,657.’

New Zealand Parliamentary Debates (subsequently NZPD), Vol. 244, pp. 360–1, 16 April 1936.

2 H-11A, Report of the National Service Department, 1946, p. 74.