Introduction

There are two approaches to the measurement of the level of economic activity. One is through output and employment, the other through unemployment. Each has its uses, but unemployment has the advantage of indicating in an immediate sense the extent of the failure in an economy to make full use of resources.

This chapter looks at the movement in the level of general unemployment in the 1930s. It then focuses on the composition of, or reasons for, unemployment: this will throw some light on various aspects of the economy, but more specifically it should indicate the extent to which the normal functioning of the economy required a certain level of unemployment—a ‘natural’ level; it should also permit an assessment of whether recovery was such as to lead to pressure on labour supplies for some industries and skills.

As is well known, however, there are great difficulties in both the concept and measurement of unemployment. This is not the place to discuss explicitly the general issues involved. Measurement is required, and contemporary statistics of unemployment exist. Answers to the above questions are sought through these statistics (and other more general evidence). This approach requires an understanding of the definitions of unemployment on which the statistics of the 1930s are based, and an assessment of the accuracy of the figures. Finally, since this approach sets unemployment in the 1930s within the socio-cultural framework of its own times, an attempt is made to give it perspective by viewing it through the concepts and experience of unemployment in the 1970s and 1980s.