kind of program that that State had. It was not just a matter of increasing the amount they paid but it was a matter of actually changing their whole philosophy of paying benefits; and Senator Dirksen, I might say to you that one of the States that we have given great consideration to was your State of Illinois where you pay on what we call a variable maximum theory, and this variable maximum theory is not very adaptable to a 50-percent or 60-percent standard. You would have to give it up and switch to some other system.

We found that there were other States also, at least one that has a variable maximum system.

We also found that imposing any kind of Federal benefit standard does not really bring the States any closer together in the disparity that exists between their maximums. In many cases it even makes this disparity greater because the weighing levels in the different States

vary.

If I might, at that point, I would like to pick up and finish what little bit I have and then would like to get these people who were present while we were working on the Federal standard to talk with you about it.

I think there were a lot of State administrators who came to the conclusion that an equitable Federal benefit standard with our present system just couldn't be devised and, consequently, I think for that reason when the Ways and Means Committee apparently reached the same conclusion, and when the House overwhelmingly endorsed this bill, I think the State administrators felt that the best job that could be done had been done and, therefore, they again now have overwhelmingly said we like this bill like it is.

But if I may pick up with my statement, I want to say that the Ways and Means Committee examined the effect such a standard would have on the various State laws and they explored with us the problems that would arise in those States paying benefits on the variable maximum system and those paying on an anual wage formula. They looked at the differential between the benefits being paid under present State laws and compared it with the differential that would exist under the proposed Federal benefit standards. They pondered the question how to impose a benefit standard on weekly amount and make it meaningful without likewise standardizing the eligibility requirements, the disqualification requirements, the earnings requirements, et cetera, of all of the States.

In other words, and I depart from my statement, one of the problems we ran into if you standardize one feature of the program and leave all the rest as to who can draw and how much money it takes to be eligible, you leave all that free to the States, you don't really solve the problem because, I may say, one State may make it twice as easy to draw its 50 percent of wages as another. So that once you get into the proposition of standardizing benefit amounts, then you must standardize duration, you must standardize eligibility requirements, you must standardize human behavior, what kind of penalties the States can exact, otherwise come will not be as rigid as others, et cetera.

Well, the committee ultimately determined that a Federal benefit standard ought not to be imposed and, Mr. Chairman, the State administrators now agree with that decision.

An official poll of all the States was taken by the interstate conference this past week. That poll indicates that the State administrators

are overwhelmingly in favor of the enactment of H.R. 15119 in exactly the same form as passed by the House.

With your permission I would like to read into the record the question put to each State administrator and then report the results obtained. The question asked was simply this:

Do you favor enactment of H.R. 15119 as approved by the House?

In response to this question 41 State administrators answered yes; none answered no; and 11 did not respond. The States answering yes have 69 percent of the Nation's covered workers and 77 percent of the covered employers. The States not responding have 31 percent of the covered workers and 23 percent of the covered employers. Of the 41 States favoring H.R. 15119, 3 qualified their vote by indicating they would not necessarily be opposed to certain amendments without specifying what those amendments were.

Mr. Chairman, the men and women who work at administering these laws at the State level believe H.R. 15119 is a good bill. We believe it makes sound improvements in the program. We hope it will be the pleasure of this committee to report H.R. 15119 to the Senate floor without amendment.

We appreciate this opportunity to express our views and if there are questions, my associates and I will endeavor to answer them. Senator DIRKSEN. Let me ask just one.

Why do you think eight State administrators failed to respond? Senator BENNETT. Eleven.

Mr. HILL. There were 11, Senator Dirksen, and always when we take a poll we will have some States that will not respond. In some instances that failure to respond can result from the fact that the State administrator and perhaps his State administration generally may not see eye to eye on the issue, and rather than have the State administration going one way and the administrator himself another they simply won't respond. In many instances we find that the issue is so close or such a difficult one that they prefer not to respond rather than to be held to it.

Actually though, we try to encourage as many States to respond to these polls as possible, because under the conference code, it is not possible for us to reveal how any given State voted, and any State administrator can tell you if he wants to how he voted on this poll; but so far as the poll itself is concerned we do not reveal the names of the States that voted one way or another.

We try to do that in order to elicit from the State administrator not a political response but a purely technical response as to what he thinks would be good in terms of operations of the program.

Senator DIRKSEN. Now, who else do you want to have comment on this?

Mr. HILL. I would like to have several of these gentlemen comment on this.

Mr. Brown here was present during the time we were working on Federal standards over in the Committee on Ways and Means. Jack, would you like to comment about why the Federal standard was omitted?

Senator DIRKSEN. Mr. Brown, you are the administrator in Pennsylvania?

Mr. BROWN. That is right, Senator.

Of course, we did a great deal of research for them. We were able to point out that actually in a lot of the States, there are about 16 States right now which have the equivalent in their laws of this kind of a standard, and it was interesting to find out that in many of those States that standard, as written to their law, does not produce a replacement of wages for a majority of the claimants in those States because of other factors in their economy or in other parts of their law. Interestingly enough among several of the States, including Pennsylvania, where our maximum does not quite meet the standard, we are paying up to 63 percent of our claimants 50 percent of their lost

wages.

So what we find is that each State has tried to tune in, you might say, its benefit formula with its economy, with its experience, with the kind of claimants, with the kind of industries that are involved, and as a result of all of these deliberations, and I could go on in great detail but I won't.

The point was pretty well made, and in fact it wasn't the first time that it had been made interestingly enough. Back in 1958 the Federal Advisory Council recommended a standard along these lines, and the Advisory Council in the State of New York made a study of that recommendation at that time, and this was reported by that Advisory Council in 1958. And I might just read the concluding statement in this, and I would be glad to submit this report for the record. It says:

Thus the proposed Federal standard fixing the maximum weekly benefit rate in each state at a percentage of the states' average weekly wage would not and could not achieve an equitable result among the states.

So in these last few months we were not the first to find this out. The New York Advisory Council found it out back in 1958 as a result of exhaustive study, and I will submit this report of theirs for the record.

Senator DIRKSEN. I have no objection.

(An analysis by the Federal Advisory Council follows:)

ANALYSIS OF THE FEDERAL ADVISORY COUNCIL RECOMMENDATION THAT THE MAXIMUM WEEKLY BENEFIT SHOULD BE FIXED AT TWO-THIRDS OF A STATE'S AVERAGE WEEKLY WAGE 1

This is intended to achieve the generally accepted goal that the majority of the claimants should receive a benefit rate equal to at least half their individual weekly wage. If this standard of fixing the maximum weekly benefit amount as a percentage of the State's average weekly wage were to be adopted, it is an unfortunate fact (apparently not realized by the proponents of this particular standard) that there would be great variation among the States in the percentage of claimants who would be stopped at the maximum weekly benefit rate. This fact may be illustrated by the following data for New York and North Carolina, on the one hand, and Illinois and Ohio, on the other hand. In the fiscal year ending June 30, 1958, 16 per cent of the claimants in North Carolina and 24 per cent of the claimants in New York State were receiving the maximum weekly benefit rate. Obviously, in these two states the great majority (84 per cent in North Carolina and 76 per cent in New York) were receiving at least 50 per cent of their weekly wage, since they were not subject to the maximum limitation. During the same period, in Illinois 84 per cent of the claimants and in Ohio 79 per cent of the claimants were eligible for the basic maximum weekly benefit rate. In these two States, only a minority (16 per cent in Illinois and 21 per cent in Ohio) were receiving at least half their weekly wage, since they were not subject to the maximum limitation.

a Abstracted from minority views, New York State Advisory Council's 1958 Annual Report.

Assume that the basic maximum weekly benefits were set at 50 per cent of the average weekly wage in each State as the result of a Federal standard. (This is actually what the public and labor members of the Federal Advisory Council recommended for the first two years of Federal standards.) The effect of this proposal in North Carolina would actually be retrogressive, since the present maximum benefit rate in North Carolina is already 52 per cent of the State's average weekly wage. The present $45 maximum in New York State is 49 per cent of the average weekly wage, so that the 50 per cent standard would require New York to raise its maximum to $46 and there would be 22 per cent of the insured claimants eligible for this maximum (as against 24 per cent under the present $45 maximum). Thus, the effect of this Federal standard of 50 per cent would be negligible in New York and North Carolina. In Ohio, if this standard were adopted a rough estimate indicates that 53 per cent of the insured claimants would still be limited by the maximum benefit rate and most of these would be receiving less than half their individual weekly wage. Similarly in Illinois, about 50 per cent of the insured claimants would still be subject to the new maximum and almost all of these would still be receiving less than half their individual weekly wage. Thus the proposed Federal standard fixing the maximum weekly benefit rate in each State at a percentage of the State's average weekly wage (whether this percentage is 50 per cent, 60 per cent, two-thirds, etc.) would not and could not achieve an equitable result among the States. The existing State differences would still be present. Uneven, inequitable treatment among the states would still prevail and this type of proposed Federal standard could not achieve uniformity even as the "minimum benefit standard" which proponents of Federal standards seek to achieve.

The many improvements that have been made in the State laws over the last twenty years indicate clearly that the State agencies have the ability and the willingness to continue to improve their unemployment insurance programs without the extra whip of Federal minimum standards, which are difficult, if not impossible, to formulate in a way that would meet the varied economic conditions among the States in an equitable and effective fashion.

It is of the essence of the American spirit that when the needs and the facts about any problem are understood by the people of any community or State, the local governmental units will take the required action. To assume that only through Federal benefit standards can these local community problems be met, is to surrender our faith in this fundamental aspect of the American character. In the field of unemployment insurance there has been no showing of the necessity for this surrender.

Senator DIRKSEN. Now, who is from Texas?
Mr. COFFMAN. Mr. Coffman.

Senator DIRKSEN. Have you some comments on this matter of standards?

Mr. COFFMAN. Yes, I would like to comment in this respect, Senator. The charge is made or the statement is made that one of the reasons we ought to have a benefit standard is the failure of the States to perform in a manner which would reach the required level.

I would suggest to you that the record doesn't support that statement because the States have constantly through the years improved and added to their structure, including the improvement of their benefit wage formula.

During the last calendar year, 21 States increased their maximum benefit amount. Just this year, with very few legislatures in session, being an off year, six States have already increased their maximum benefit amount by some amount.

The point I make is that the States are constantly improving this situation, and I am confident that they will continue to improve, as they have through the years.

In the early stages of consideration of this bill we went back and studied the legislative history of the 50 States in this connection, and we find that since the inception of this program there have been more

than 500 legislative enactments in the States improving unemployment compensation in those States. I think this speaks for itself. The CHAIRMAN. Let me ask a question, if I may, at that point, Senator. I just want to get one or two things straight in my mind.

When this program first went into effect, and I am looking at page 40 of this document prepared by our staff, you will notice 17 States in 1939 had benefits that were 70 percent or more of the average weekly wage. Nine States had benefits exceeding 65 percent of minimum wage. Now, between those two, those are 26 States that exceeded 65 percent of the average wage. Eight States exceeded 60 percent, 12 States exceeded 55 percent. All but two States exceeded 50 percent. Now there is only one State that exceeds 55 percent of average wage, 17 States exceeded 50 percent, that would be 18 States. How did this sharp shift come to happen and why?

Mr. RAUSHENBUSH. May I take that. I am Paul Raushenbush of Wisconsin and I think, perhaps, I have some personal responsibility for how that happened which I haven't previously put forward in this kind of a record.

I was asked, because I had been the first administrator of an unemployment compensation law in this country and had helped draft the Wisconsin law to get it passed and then had, much to my surprise, been drafted to administer it and I have been at it ever since. Well, in the early history of Federal participation, a few years after we passed our law, I was asked to help draft a bill which the Committee on Economic Security might send out to the States, and in the process of drafting that bill what figure did I put in? I put in a $15 maximum weekly benefit amount figure. I didn't try to say how each State should roll its own, and under the pressures of time limits and the like, a good many States just took that $15 figure.

Now, Senator, as you very well know, a flat dollar figure will be a very uneven percentage of wages in a great many different States. So this is partly a historical accident that you started that way.

Now, over the years in every State year by year in their legislatures they have been considering what the proper figure ought to be. What should be the maximum weekly benefit amount for the highest paid workers, and they have been adjusting this time after time.

Take in Wisconsin, since I know that better than any other situation. We have a statutory mandate to a joint labor-management advisory committee to bring in recommendations to the legislature every 2 years, and we have done that year after year after successfully getting joint agreement and, as a result, our maximum weekly benefit amount is now at a $58 level. We happen to have an escalator clause, so that we go to not 50 percent, but 52% percent of the average statewide wage. We like that device. We have recommended it to other States but that doesn't mean that we think the Congress ought to force it on everybody. We like the educational process.

We still think State responsibility in these matters is desirable. So I want you to realize that a lot of progress has been made by the States over the years. If anyone says that the States haven't been improving their laws, let me give you a couple of figures.

Back in 1938 or 1939, what was the maximum possible amount, the total amount of benefits that the highest paid worker, and most steadily employed worker, could possibly draw? It was about $300. I