Unemployment and Unemployment Funds: Subsidies rather than mandatory Insurance

During the interwar period, the standing of unemployment insurance was similar to that of health insurance. The lack of obligation at the federal level resulted in uneven protection against unemployment. Only ten percent of the workforce was even insured. The federal act of 1924 did little to change this.

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The Federal Council and Parliament had already rejected a proposal to create unemployment insurance prior to the First World War. Mandatory insurance was also not stipulated by the 1924 federal act on the payment of contributions. Indeed, the Confederation merely increased contributions into existing public and private unemployment funds. The socio-political function of unemployment support was thus delegated to 61 funds in total – most of which were provided by unions and insured around 185,000 people in 1923.

This regulation only encompassed ten percent of the workforce and largely built on the practice of existing unemployment funds and the municipalities. In 1884, the Swiss Association of Typographers founded the first unemployment fund and other occupational sectors soon followed suit. After the turn of the century, several cantons began to subsidies these funds following the example set by the Belgian city of Gent. In turn, the Confederation promoted job placement from 1909. In terms of policy, however, Parliament and Federal Council put off an insurance solution as demanded by the working class. Due to an impending rise in unemployment figures, the municipalities, cantons and the Confederation finally decided to expand welfare for the unemployed in need as from 1917. Concurrently, the Confederation became involved in the system of the cantons based on the Gent model. Once the remaining crisis measures were lifted, this financial plan persisted and became law in 1924.

This law led to an upturn in unemployment funds, albeit modest. In 1936, 204 funds provided insurance for 552,000 people. Roughly 28 percent of the workforce was thus insured. After all, around half the cantons had by then declared the insurance as mandatory. In contrast, the union funds were somewhat weakened since the regulation of 1924 granted them lower contributions compared to those of public and parity funds. This, though, was so intended by of the bourgeois majority in Parliament.

Literatur / Bibliographie / Bibliografia / References: Tabin Jean-Pierre, Togni Carola (2013), L’assurance chômage en Suisse. Une socio-histoire (1924-1982), Lausanne.