North America’s Divide - The Political Geography of Inequality - page 106

unemployment insurance system. In 1919 the Canadian Royal Commission on
Industrial Relations recommended a national insurance scheme to deal with the
temporarily unemployed (McIntosh and Boychuk 2001 : 81-82). The context
changed rapidly half way through the decade when a slight economic recovery
put the issue aside in the political agenda. In addition, at this point the lib-
erals were in coalition with the Progressive Party, an organization, created to
defend the interests of farmers, who had little interest in developing any form
of encompassing unemployment insurance at the federal level. Their key policy
aimed to secure, via immigration and resettlement, a large enough contingent of
unskilled workers for agricultural tasks, a legacy, I argue, that directly shaped
the patterns of interprovincial migration in Canada.
The link between demobilization and early discussions about unemploy-
ment insurance is also very clear in the case of the United States. As in Canada,
discussions about Unemployment Insurance date back as far as 1916, when
Congress voted to draft legislation on the matter. The proposal did not go
forward. During the 1920s and early 30s the conventional approach to unem-
ployment relief remained unchallenged at the federal level. As the depth and
duration of the Depression extended, the Senate Committee on Education and
Labor held hearings “on the national problem of unemployment” (McGowan
1999 : 3). In 1931 and 1934 Senator Robert Wagner introduced proposals for
a joint federal-states Unemployment Insurance system. Although the bills were
not even voted on, the 1934 proposal became a very important precedent of
the institutional design ultimately adopted for unemployment insurance in the
United States.
The institutional evolution on both sides of the border reflects an enduring
legacy of political fragmentation in the approach to public policy issues. In the
United States the use of local poor relief was heavily linked to organizational
features of patronage democracy (Orloff 1988 ). In Canada, as Pal puts it,
“the British North America Act had little to say about those activities that now
comprisethewelfarestate[...].”Inaddition, as elaborated in Chapter 3 , both
in Canada and the United States at the time, political representation follows
a decentralized form of federalism (Chhibber and Kollman 2004 ; Finegold
and Skocpol 1995 ). This brings us back to party system organization, already
introduced in Chapter 3 .
The institutional fragmentation of the welfare system was a direct corre-
late of the presence of a decentralized party system. The Liberal Party in
Canada is generally thought to be a stronger and more centralized political
machine. Arguably, this would reflect Canada's parliamentary system, whereas
the United States has a presidential one. Following this line of argument, it
would be logical to conclude that the eventual centralization of unemployment
insurance in Canada simply follows from the fact that the parliamentary sys-
tem created a more centralized party structure, which in turn prevailed over
provincial differences about the policy. While this contention might be a good
characterization of the post-1945 situation, it misrepresents the political situa-
tion of the two North American federations at the onset of the Depression.