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Out of work: the first century of unemployment in Massachusetts.

Out of Work: The First Century of Unemployment in Massachusetts.

By Alexander Keyssar. New York, Cambridge University Press, 1986. 469 pp. $49.50, cloth; $14.95, paper.

Alexander Keyssar's book is a scholarly contribution and a valuable resource to economists, labor historians, trade unionists, and policymakers. Keyssar investigates labor markets from the 1870's to the 1920's, a period often passed over by present-day economists and economic historians who tend to direct more attention to the Great Depression and Industrial Revolution in the United States. (John A. Garraty's Unemployment in History: Economic Thought and Public Policy and Gordon, Edwards, and Reich's Segmented Work, Divided Workers are notable exceptions.) He blends an abundance--sometimes an overabundance--of empirical data with impressionistic evidence depicting the extent and character of the period's unemployment.

Idle labor is a centuries-old phenomenon. But as the structure of production shifted toward manufacturing throughout the 19th century, the consequences for a typical jobless worker became harsher by the 1870's with the disappearance of alternative activities such as household production.

With the stage set, Keyssar then offers four original viewpoints in Out of Work. First is his chronicling of the unbelievably slow pace at which unemployment came to be regarded as a conspicuous social problem. Public perception only gradually evolved from considering unemployment as an individual, labor supply problem to understanding it as a labor demand problem endemic to the industrial economy. The tendency for chronic unemployment to uproot many working men was initially regarded as "the tramp problem.' Reforms to prevent unemployment or its hardship were routinely rebuffed until 1915, when government and business began to recognize the threat of unemployment to the existing social structure. Economists viewed unemployment as transitory and thus proved little help in remedying it.

Keyssar also describes how chronic unemployment gradually transformed trade unions from organizations promoting universal policies to benefit all labor such as a shorter workweek to policies pursuing exclusionist measures, for example, restricting apprenticeships in order to protect members' jobs.

The author creatively uses the available data to construct unemployment frequencies--the percentage of workers unemployed at some point during the year. The data reveal startlingly high frequencies upwards of 30 percent in the depths of a downturn and surprisingly high proportions in prosperous times as well.

Keyssar's final and most important point derives from these frequencies. The 1870-1920's era was apparently characterized by a substantial volatility in employment. Income insecurity rather than low incomes per se was thus the key problem workers faced. Their vulnerability to sudden layoff and income loss cut across occupations, industries, ethnic groups, and gender. One immediate and two subsequent developments from this era could be traced to the widespread income insecurity. Keyssar colorfully illustrates how workers established ad hoc methods of coping with the persistent threat of unemployment. Children were periodically sent to work and debt was commonly incurred with local shopkeepers. After 1915, businesses began to discover the costs associated with high labor turnover. Some implemented progressive personnel practices including the offer of continuous employment over seasonal (but not cyclical) fluctuations, work sharing, and a rationalized allocation of layoffs based on seniority. The modern implicit contract and its increased predictability of incomes were thus born. Finally, the widespread income insecurity ultimately led to the adoption of unemployment insurance programs.

Despite its merits, Out of Work has some shortcomings. The author often fails to clearly distinguish structural, frictional, and cyclical sources of unemployment, essential in assessing the consequent hardship. Also, there is no direct mention of productivity growth in industry and its potential role in suppressing employment levels, shortening the workweek, or varying wages and living standards. In addition, Keyssar often subtly implicates but never really outright indicts the widely accepted employment-at-will doctrine as the ultimate source of the era's employment volatility. This is perhaps the principle message and it is left to the reader to infer. Finally, it is also left to the reader to gauge the relative condition of labor because we are given no reference point. Perhaps some of the redundancy that appears throughout the book could be sacrificed for some comparisons to unemployment frequencies, the composition of the "reserve army' of unemployed, and the use of short-time versus layoffs in more recent years.

A final comparison Keyssar misses is the parallel to the current fad of identifying laissez faire as the policy solution rather than the problem. Even with these shortcomings, Out of Work reminds us that labor market instability and unemployment were the cause of union and government intervention rather than the result of it.
COPYRIGHT 1986 U.S. Bureau of Labor Statistics
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Copyright 1986 Gale, Cengage Learning. All rights reserved.

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Author:Golden, Lonnie
Publication:Monthly Labor Review
Article Type:Book Review
Date:Dec 1, 1986
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