652 TRANSACTIONS OF SECTION F. 



2. Labour Exchanges and the Unemployed Problem. 

 By W. H. Beveridge, M.A., B.C.L. 



The function of a Labour Exchange is to reduce friction in the process of 

 adjusting local demand and supply in the labour market. Apax't from imem- 

 ployables, the mass of distressed unemployed are of three types: (1) Men 

 permanently displaced from their chosen occupations ; (2) men exceptionally 

 and temporarily thrown out by seasonal or cyclical depression of trade ; (3) 

 irregular or casual workmen — the chronically under-employed. The third type 

 is («) in bulk the most serious part of the unemployed problem — in Loudon 

 three out of four of the distressed unemployed belong to the chronically under- 

 employed class ; (b) a direct product of industrial friction. 



The industrial characteristics and functions of the under-employed class, as 

 illustrated by the dock or wharf labourer. The casual dock labourer is neither 

 unemployable nor superfluous; he is required to be always or recurrently 

 available to meet fluctuations of work, though not constantly employed. The 

 numbers required at any one dock department or wharf depend upon the flow of 

 work at that one place. But the number of individuals required for the work of 

 a district, including many docks or wharves, depends not only upon the total 

 flow of work in that district, but also upon the mobility of labour within it. 

 The London and India Docks in 1887 and in 1904. In any occupation where 

 work is irregular the unification of the disconnected fluctuating labour demands 

 of many businesses into a single steadier demand centralised at a labour 

 exchange enables a large stagnant reserve of labour accumulated round the 

 separate places of employment to be replaced by a smaller mobile reserve directed 

 from the exchange, in which each individual performs correspondingly more work 

 and earns more regular wages. 



Application of the foregoing argument to (a) other irregular employments — 

 e.(/., builders' and contractors' work; (b) the whole of industry. Increase of 

 mobility means an increase in the Avorking efficiency of labour : less looking for 

 work, more work and wages. 



Desirability and practicability of furthering the mobility of labour by means 

 of a connected system of labour exchanges. Consideration of current objections 

 to : (1) its desirability— e.^., that labour is already sufficiently mobile, that 

 employers have as many men as they want, that the change would simply give 

 more regular work to one set of men at the cost of another set, who Avould be 

 thrown out of work altogether; (2) its practicability — e.g., that labour 

 exchanges have been tried and failed, that employers will not agree to take 

 their men from a labour exchange. All these objections can be met separately. 

 They are subject also to the general answer that the casual labour question has 

 to be solved somehow, and to the negative argument that it cannot be solved 

 by any other means than the extinction of casual employment. Temporary 

 assistance of the under-employed man is useless, and his permanent removal to 

 another occupation leaves the cause of his under-employment still acting. 

 Labour exchanges have never been taken seriously in this country because people 

 have been content to describe their function as the increasing of the fluidity of 

 labour (an end of no obvious practical advantage to anybody) without going 

 on to observe that greater fluidity means greater working efficiency, less leakage of 

 labour power in passing from one employment to another, more regular earnings. 

 The question of marketing is as important in regard to labour as in regard to 

 ordinary commodities. 



Conclusion : Labour exchanges touch all branches of the unemployed problem. 

 (1) They will not save men from being displaced by the intiroduction of 

 machinery, but they will help these men to find fresh openings. (2) They 

 will not prevent industrial depressions, but (a) they will make more general 

 the iise of subsidiary trades, and (b) by raising, as is described in the next 

 .sentence, the whole standard of life and earnings at the bottom of the industrial 

 scale they will make thrifty provision against exceptional distress «ore possible. 

 (3) Labour exchanges in modifying casual employment lead the way to the 



