South Australia’s employment relief program for assisted immigrants: promises and reality, 1838-1843

ABSTRACT

Great Britain established the colony of South Australia (SA) in 1834, requiring that revenues from colonial land sales be used to subsidize passage for emigrants to SA. Their immigration contract required the SA government to provide emigrants unable to find private sector work with employment on public works. We use new data on the compensation of relief workers and private sector workers to examine how the SA unemployment system functioned before and after a major economic crisis began in August 1840. We conclude that the unemployment system provided highly compensated relief employment to a small number of migrants prior to the crisis. As the number of migrants claiming relief employment soared between August 1840 and October 1841, the government drastically cut relief compensation. The cuts occurred in tandem with the release of newly surveyed rural lands, which together provided incentives and opportunities for workers to move to rural areas to seek employment. Finally, a comparison of the SA employment relief program with a temporary employment relief program in New South Wales (NSW) shows that the NSW program neither guaranteed relief employment nor provided jobs for all assisted migrants without work in NSW during the 1843–1845 period.

KEYWORDS:

• Relief
• unemployed
• South Australia
• migrants
• public works

Acknowledgments

We thank the two reviewers and the editor of Labor History for their insightful comments. We also thank John Wallis, Tim Hatton, Laura Panza, Martin Shanahan, Peter Hoffenberg, and participants in the 2019 All-UC Economic History Conference, the 2019 Conference on Digitizing Australia’s Past, and a University of Hawaii Dept. of History Workshop for their valuable comments and staff at the U.K. National Archives, University of Hawaii Hamilton Library, State Library of Victoria, State Library of New South Wales, State Library of South Australia, the National Archives of Australia, and State Records of South Australia for their assistance in locating sources.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Harris and La Croix (2020) analyze individual data for assisted migrants and their dependents who received rations due to sickness or destitution in 1840.

2. Lindert (1998, p. 102) observes that after adoption of the new Poor Law in 1834, average living standards in England and Wales increased but poor relief, as a share of national product, fell to around 1 percent in the late 1830s and support for able-bodied workers unable to find work fell sharply. From 1851 the majority of those receiving relief were dependents, with able-bodied laborers unable to find work making up less than 0.1 percent of adult males on relief.

3. For an excellent comparison of the South Australia relief system with Britain’s Old and New Poor Laws, see Dare (1992).

4. When the colony was established the positions and roles of resident commissioner and governor were separate and distinct, with the former responsible to the Commissioners and the latter to the British Colonial Office. In the first 18 months of settlement it became obvious that this division of power was unworkable so, from October 1838, the two positions were combined under Governor George Gawler.

5. British Parliamentary Papers (1837, Nov. 11). Second Address by the Editors of the South Australian Gazette to Intending Emigrants, South Australian Gazette and Colonial Register, 2. In her research, Jade Riddell finds that SA’s leading colonists often painted a rosy picture of the SA economy since high early wages – typical of new colonies – would be mitigated by new streams of emigrants drawn to a growing colony. Conversation with Dr. Jade Riddell on 24 July 2019 in Adelaide, South Australia.

6. See (24, March 1838). Mr. Fisher’s Pauper Laborers. South Australian Gazette and Colonial Register, 1. In the article some colonists question whether these men were really unemployed because they claim ‘there are no pauper emigrants in the Province of South Australia [original emphasis].’

7. See (24, March 1838). Mr. Fisher’s Pauper Laborers, South Australian Gazette and Colonial Register, 1

8. See (24 March 1838). Mr. Fisher’s Pauper Laborers. South Australian Gazette and Colonial Register, 1.

9. Several recent studies have focused on the optimal rate of wage replacement in modern developed economies. For instance, Chetty (2008, p. 221) finds that it is more than 50 percent in the United States; Landais et al. (2018) estimates that it ranges between 33 and 50 percent in the United States; and Pollak (2007) identifies a 40 percent rate in Germany.

10. Full compensation for married workers is calculated by assuming they have three children and receive an additional half ration.

11. Panza and Williamson  (2017) also calculate bare bones and respectable baskets for a worker with a wife and two children.

12. Methods and wage and price data used to estimate the cost of the bare bones basket are available from the authors upon request. All prices used to calculate the bare bones basket are either retail prices or, in selected instances, wholesale prices adjusted with a markup based on equivalent wholesale and retail prices reported either in the government Blue Books or newspapers during the previous year.

13. The additional land sales were primarily due to Governor Gawler’s decision in December 1838 allowing ‘special surveys’ of 15,000 acres to proceed and to be prioritized over other survey work. See Harris and La Croix (2019) for a full analysis.

14. This is the only pre-crisis period for which we have a reliable weekly series for relief employment. Figure 2 provides a monthly series for 1840 which also reports low levels of relief employment during the first half of 1840.

15. Why was relief employment compensation so generous during the colony’s first 4.5 years? We speculate that generous compensation was partly due to the relief system’s employment of relatively few migrants and the very short duration of relief employment.

16. The total amount dishonored was calculated from 20 August 1840, when the Commissioners ceased accepting Gawler’s bills, to 1 March 1841.

17. SA land sales made in England fell from 18,896 acres in the fourth quarter of 1839 to 1,820 acres in the first six months of 1840. SA land sales made in SA fell from 29,418 in the last six months of 1839 to 2,446 acres in the first six months of 1840. See British Parliamentary Papers (1843, pp. 218–219).

18. The SA Emigration Agent required that families of relief workers also be housed in the Emigration Depôt (Pike, 1967). The Depôt was a mixture of tents and rudimentary huts located in the parklands just outside the Northwest corner of South Adelaide. Boys housed there went to school for a half day and worked the rest of the day.

19. To calculate the welfare ratio for a married man on relief employment after Grey’s cuts, we assume the man has three children. This increases weekly pay by 2s 6d per week for the first child, 2s 3d for the second, and 2s for the third.

20. Additional worker demonstrations occurred in October 1841. Leaders presented a second memorial pleading for better relief compensation to Governor Grey.

21. These types of protest actions during the Australia-wide economic downturn in the first half of the 1840s were not confined to SA. For example, from January 1843 in NSW, unemployed workers agitated for government action to provide some relief from their situation, including to stop employment of convicts. NSW Governor Gipps failed to act and large public meetings, protests, petitions, and deputations to Gipps continued throughout the year to pressure the governor into action (Irving, 2006). By July 1843, after yet another public meeting attended by 3,000 people, Gipps made a ‘tactical retreat’ and committed to establishing an unemployment registry office as well as providing limited relief employment (Irving, 2006, p. 96). For more details on the extent and nature of protests by the unemployed in Australian colonies during the first half of the 1840s as well as the various government responses, see Irving (2006), Irving and Cahill (2010), O’Brien (2015), and Quinlan (2019).

22. For reports of workers preferring relief employment to private employment, see Grey to Russell, 7 June 1841 in No. 6, British Parliamentary Papers (1843), Vol. xxxii, p. i. For accounts of employees owning cattle or ‘managing to pay for land and cottages, while receiving government support,’ see Report of Emigration Board, 11 January 1842 in Enclosure i in No. 29, British Parliamentary Papers (1843), Vol. xxxii. Other examples in the text are from Mills, 1974, p. 248) and from correspondence of Emigration Board Chairman G.V. Butler (State Records of South Australia, GRG 24/83 Copies of correspondence and printed matter, 1841–1842).

23. From 1839 to 1842, SA’s total compensation for relief employment varied only by a worker’s marital status and the number of children in the household and not by occupation or prior earnings. This means that the compensation provided for relief employment replaced a higher percentage of an unskilled worker’s relatively low compensation than a skilled worker’s relatively high compensation. Thus, unskilled workers had more incentive than skilled workers to choose relief employment over private employment. Incentive does not, however, always imply measurable actions. For example, Benjamin and Kochin (1979) document a similar experience rating system in 1920s/1930s Britain. In an econometric analysis using data on individual workers, Hatton and Bailey (2002) show that the ratio of benefits to wages did not affect the probability of an adult male worker being unemployed in 1920s Britain.

24. While both single and married workers might be willing to take a discount in compensation to remain in Adelaide to enjoy urban amenities, married men with wives working part-time domestic jobs in Adelaide had additional incentives to stay as these part-time jobs would be more difficult to find in country districts.

25. During the 1841 economic crisis, specie was becoming scarce in SA and many private employers began to pay their employees in rations rather than money (British Parliamentary Papers, 1843, p. 190). Payment in money wages rather than rations for relief employment provided a new incentive for workers to choose work on public projects.

26. The grazing industry also substantially expanded in SA during the early 1840s, but due to its low labor requirements employed few shepherds and other workers.

27. According to the farmers interviewed by the Legislative Council Committee, the Masters and Servants Act (5 Vic. 1841, No.10) of 1841 may have created an additional disincentive for unemployed workers to move to rural districts. The use of this type of legislation in Australian colonies was widespread and, in most disputes, tended to favor employers. Moreover, local magistrates and justices of the peace who heard cases under this act were predominantly land-owners. This led to abuse of power that over time became a recurring theme in public debates around the use of such legislation in Australia (Quinlan, 2014).

28. This calculation is the average annual cost of providing relief as computed with price and wage data from the first half of 1840.

29. Copy of a Despatch from Governor Grey to Lord Stanley, 22 February 1842 and Enclosure 3 in No. 42, Returns of Trades and Occupations of Emigrant Laborers on the Government Works in British Parliamentary Papers (1843, pp. 162–164, 173).

30. For further information, see (30 July 1841). Parliamentary Proceedings on South Australia. Southern Australian, 3. Pike (1967, pp. 190–195) spells out how additional bills issued by Governor Grey in 1841 and 1842 were not repaid by the Treasury but instead were converted into debentures that were ‘payable at the discretion of the colonial government’ and could be sold only at a deep discount.

31. From 1832 to 1842, Haines (1997, Appendix 2) found that 54,527 assisted migrants from Great Britain arrived in NSW, most of them under the auspices of the bounty system. NSW colonists who arranged for a person from specified occupations to migrate could claim a bounty from the NSW government after the migrant’s arrival in NSW. From 1839 the system changed to allow ship owners to select migrants according to specified criteria and claim bounties when migrants arrived in NSW and were certified. For a review of bounty migration to NSW, see Haines (1997).

32. Australian Historical Population Statistics (2019, Table 1).

33. Reports of the unemployment problem in the first five months of 1843 include (5 January 1843). City Council, Tuesday 3^rd January. Australasian Chronicle, 2; (2 January 1843). Free Labor. The Australian, 2; (18 January 1843). Public meeting of the Coolie oppositionists. The Sydney Morning Herald, 2; and (11 February 1843). The Labor Market. The Sun and NSW Independent Press, 2.

34. Fourteen of 27 rural districts experienced labor shortages (British Parliamentary Papers, 1844a, pp. 135–140).

35. The Council offered relief employment exclusively to married men and capped their number at 300. Jobs were rationed according to ‘number of dependents and their needy situation, as long as they were also of good character’ (Sydney City Council (2020)). Available at http://archivesinvestigator.cityofsydney.nsw.gov.au/Entity.aspx?Path=%5CActivity%5C22.

36. See also: (9 September 1843). City Council. The Australian, 2.

37. Also see (16 August 1844). Legislative Council. Sydney Morning Herald, 2, and (2 October 1844) Legislative Council. Sydney Morning Herald, 2. In August 1844 Legislative Councilor William Wentworth asserted that 4,000 people had left the colony during 1843. Beyond the Valparaíso emigration, the only other direct evidence of out emigration from NSW in 1843 comes from a South Australian report that 1,168 people emigrated to SA from other Australian colonies. We surmise a substantial number came from NSW (169,135 people in 1843) rather than the much smaller Van Diemen’s Land (60,664 people) or Western Australia colonies (4,350 people). See Pike (1967, p. 517).

38. See: (2 October 1844). Legislative Council. Sydney Morning Herald, 2.

39. We include the value of rations for both single and married farm laborers and shepherds.

40. An alternative explanation is that setting relief compensation at the desired level becomes more difficult when wages are volatile as they were in NSW and SA during the 1838–1845 period. In fact, the NSW 1843 Select Committee spent considerable time discussing the remuneration men were willing to accept in private employment (British Parliamentary Papers, 1844a, pp. 87–115).

41. See Shaw (2003, p. 148) and (21 April 1842). Immigration. Port Phillip Patriot and Melbourne Advertiser, 2.

42. (11 May 1842). Port Phillip. Colonial Observer, 255. There is no evidence of exactly when the men returned to work after this strike action.

43. See Correspondence of Emigration Board Chairman G.V. Butler (State Records of South Australia, GRG 24/83 Copies of correspondence and printed matter, 1841–1842).

Additional information

Notes on contributors

Edwyna Harris

Edwyna Harris is a Senior Lecturer in the Department of Economics at Monash University and a research affiliate at the Centre for Economic History at Australia National University. Her research focuses on property rights to natural resources, environmental effects of those regimes, and institutional change in Australia.

Sumner La Croix

Sumner La Croix is Professor Emeritus in the University of Hawaiʻi-Mānoa Department of Economics and a research fellow with the University of Hawaiʻi Economic Research Organization. La Croix is the author of the 2019 book, Hawaiʻi: Eight Hundred Years of Political and Economic Change.