134 SECTIONAL ADDRESSES. 



during the coal stoppage), falling to less than 9 per cent, in 1927, and 

 rising again to over 12 per cent, in 1928. The chief instance of this 

 maladjustment of wages is perhaps to be seen in the maintenance of the 

 average level of wage-rates (in spite of a large reduction in the important 

 item of miners' wages) since 1924, while other prices were being adjusted 

 to the level required by the return to the Gold Standard. Money wages 

 have been maintained (which means that real wages have increased about 

 8 per cent.), while the prices which British industry received for its 

 products, as measured by export prices, were reduced on an average 

 14| per cent., and the number of unemployed, comparing 1929 with 1924, 

 increased. Comparisons of wage-movements with physical volume of 

 output point to the same maladjustment. Real wages increased on an 

 average by 12 per cent, between 1907 and 1924 ; a comparison of the 

 Censuses of Production of 1907 and 1924 suggests that output per head 

 did not increase, or increased only very slightly.^ 



It would appear, therefore, that wage-fixing authorities, acting 

 independently of one another and disregarding the general economic 

 situation, are maintaining wage-rates at a level at which existing in- 

 dustries cannot provide full employment ; the considerations that 

 explain their policy will not serve to explain away the unemployment 

 that has accompanied it. The outlet for labour thus excluded, which 

 was provided before the war by industries in which wages were not 

 controlled, no longer exists. There remains for examination the 

 possibility that new industries may provide an outlet, industry as a 

 whole expanding sufficiently to absorb the excluded labour. 



VII. 



Before the war we had no measure of industrial expansion ; but there 

 was no evidence of cumulative unemployment, so that industry must 

 have expanded at much the same rate as the growth of population. Since 

 192-3 we have had, in the unemployment insurance statistics, a record 

 of the directions in which industry is expanding and contracting, which, 

 with certain other information, supplies such a measure. It would seem 

 that industry has, temporarily at any rate, lost its capacity of expansion. 

 In insured industry, which covers about three-quarters of wage-earning 

 employment, the expansion of employment has been barely sufficient to 

 absorb the diminished increase in the population seeking employment, 

 without affording any relief to the mass of unemployment afflicting 

 industry. 



In certain directions there is expansion, but a closer examination 

 compels us to discount any hopes derived from it. The largest single 

 increase in employment has been offered by retail distribution, 360,000 

 or 31 per cent, between 1923 and 1928. A part of this may be at the 

 expense of the small shop-keeper, who does not come into the insurance 

 figures, in which case it, however, represents no net increase of employ- 

 ment ; the greater part probably does represent a net increase, but an 

 uneconomic increase. The Balfour Committee brought together material 



' A. L. Bowley, A New Index Number of Wages, pp. 4-5. 



