Unemployment was largely a fact of life in Britain throughout the 20th century, with the rare exception of the period during and immediately after the Second World War. The level of unemployment in the population is used by economists as a key indicator of the state of the economy. The human cost of unemployment, for individuals and their families, and for communities, has not always been fully recognised by economists or governments, but the pressures it throws up can be immense, giving rise to profound political and social change.
The 20th century witnessed two particularly severe depressions in Britain - in the 1920s and '30s and in the 1980s and '90s - in which unemployment reached as high as 25 per cent of the adult labour force (and even higher in some areas).
The depression of the 1920s followed a brief boom after the end of the First World War. By 1922, unemployment had reached two million. A prolonged crisis in the coal industry led to the brief and ultimately unsuccessful General Strike of May 1926. On 29 October 1929, the New York Stock Exchange crashed, leading to the United States calling in its loans to European states, which in turn led to near total economic collapse across Europe just as recovery seemed on the way. The depression bit hard, particularly in Germany, but the effect on Britain's staple industries - shipbuilding, coalmining, iron and steel and textiles - was crippling. Worst affected were Scotland, the North-East, Lancashire and South Wales. In some areas, unemployment affected as much as 80% of the workforce.
The immediate political impact of the depression was the fall of Ramsay Macdonald's second Labour government in August 1931, to be replaced by a National Government, with Macdonald remaining as Prime Minister. But widespread disaffection with mainstream politics also led to a growth in membership of the Communist Party and, to a lesser extent, to increased sympathy for Oswald Mosley's British Union of Fascists.
After a series of government measures, unemployment fell from a high of nearly three million in 1933 to under two million by 1936. But as the Jarrow March of November that year demonstrated, the recovery was uneven, and many areas were still suffering greatly. It took the outbreak of war with Germany (whose Nazi Party had itself come to power thanks largely to frustrations at the country's economic woes) to bring the depression to an end, with full employment declared in 1942. Memories of the hardships of the 1930s were behind the introduction of unemployment benefit by the Clement Atlee's postwar Labour Government.
In 1979 Margaret Thatcher's Conservative government came to power thanks in part to a highly successful advertising campaign in which it declared 'Labour isn't working'. The last years of the Callaghan government had indeed been blighted by economic downturn, with unemployment reaching two million for the first time since the 1930s. But unemployment continued to rise under the Conservatives, hovering around the three million mark for much of the decade. Moreover, there is strong evidence that several 'adjustments' to the method of calculating the numbers unemployed disguised much higher figures (similar recalibrations continued into the Major and Blair eras, making any reliable gauge of the progress of unemployment over the period near impossible).
The 1980s cemented a trend in British industry that had begun in the previous decade, with the decline of shipbuilding, steel, iron, coalmining and manufacturing. Once again, the pattern of unemployment was uneven. While the South East, for example, was relatively untouched, Scotland, South Wales and Northern cities like Liverpool, Sheffield and Newcastle suffered most. New jobs in the service and finance sector did not necessarily appear where they were most needed, and many commentators began to worry about the opening of a dangerous 'North/South divide'.
Although the recession of the 1980s had a worldwide impact, its effects were arguably exacerbated by moneterist policies in Britain and the US, which emphasised the primacy of the market and a non-interventionist approach to industrial decline, alongside a focus on low inflation and taxation, at the expense, if necessary, of high levels of unemployment. Indeed, it was claimed by some that high unemployment was a matter of strategy for the Thatcher government, designed to weaken the influence of the trades unions - although this allegation was fiercely denied. Regardless, trade union membership and influence declined during the 1980s, particularly after the failure of the Miners' Strike of 1984-85, which largely crippled the once-powerful National Union of Mineworkers. It's worth noting, though, that for many - and not just on the Thatcherite right - the decline of trade union power was a necessary corrective to the serious industrial unrest of the 1970s.
One feature of this period was the return of a Victorian distinction between the 'deserving' and 'undeserving' poor, with Conservative politicians and newspaper columnists complaining of widespread 'benefit scrounging', by people who were either too idle to seek work or who were illegally claiming benefits to supplement their wages.
Periods of high unemployment have also been shown to contribute to social unrest, and the urban riots in London, Liverpool, Manchester, Birmingham and elsewhere in the early 1980s have been attributed in large part to poverty and deprivation caused by disproportionate unemployment among young people. The ethnic tensions that were also a factor of much of this unrest may also have unemployment as one of its major causes, as high unemployment tends to lead to greater anxieties about immigration and to increased racial conflict.
By the end of the 1980s, the recession was on the wane, but unemployment remained high well into the 1990s. The end of that decade, after the defeat of John Major's Conservative government by Tony Blair's New Labour, saw unemployment finally fall below 1979 levels. But the cost of this reversal was a new reliance on a 'flexible labour market' - relatively short-term contracts, job sharing and part-time working - in place of the now distant memory of 'a job for life'. A further concern, in an era of increasingly global employment practices, was the growing tendency of international companies to dismantle or relocate substantial elements of their business overseas in pursuit of cheaper labour or a more pliant workforce. While in some sectors, notably banking and other financial services, companies have been forced to respond to a consumer backlash against such practices, in others governments and workers have been powerless to prevent often serious job losses and the consequent impact on communities.
Mark Duguid
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