By 1932, the U.K. had been running a national unemployment insurance system for more than 20 years. But no amount of experience could prepare the government for the demands of the Great Depression.
The National Insurance Act of 1911 provided health-care coverage and industrial unemployment benefits to the unemployed. Workers, employers and the government contributed to the fund.
The Depression overwhelmed the system’s finances. Designed to cope with a 5 percent unemployment rate, the fund neared collapse when 17 percent of British workers lost their jobs. Making matters worse, there were fewer and fewer work opportunities available.
Pressed to impose austerity, the Conservative-led coalition government reduced unemployment benefits by 10 percent, raised contribution requirements, decreased the payment period to 26 weeks and introduced a stringent means test to determine if families qualified.
The benefits cut hit laboring classes the hardest. Most industrial workers earned $7 to $11 for a 48- to 50-hour week in 1932. The U.K.’s standard unemployment payment had been just under $4. With the reduction, this dropped to $3.45, about $90 over 26 weeks. The result was hunger and protest.
The means test provoked a lasting bitterness. Local inspectors visited households to probe families’ resources to see if they qualified for continuing benefits, which, even when paid, often weren't enough to live on.
In response, the National Unemployed Workers Movement organized protesters to march through Glasgow. In September 1932, the movement proposed a Scotland-to-London hunger march, demanding higher taxes on the rich and reform of the unemployment system. The Economist argued that the means test had been “hastily improvised,” promoted “grievance and resentment by frequent harshness in its application" and needed to be overhauled.
In late October, about 2,000 “ragged” marchers made their way to London from Scotland, Lancashire and Wales, the New York Times reported. Along the way, local labor organizations provided food and sleeping quarters. By the end of October, the protesters had reached Hyde Park.
“The saddest sight of all was a group of the unemployed from Dagenham, where Henry Ford’s vast British factory is working at a fraction of capacity,” the Times reported. “They were so weak that they could not march around the park with the others, but slumped down on the grass.”
Outside the park, about 15,000 London sympathizers rioted, smashing plate-glass windows on Edgeware Road and battling foot and mounted police in Park Lane.
The discontent spread across the Atlantic. Within days, 10,000 Chicagoans marched through the city, chanting: “We want bread!” It looked as if the coming winter would be miserable for millions.
(Philip Scranton is a Board of Governors professor of the history of industry and technology at Rutgers University, Camden, and the editor-in-chief of Enterprise and Society. He writes "This Week in the Great Depression" for the Echoes blog. The opinions expressed are his own.)
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Philip Scranton at email@example.com