In 1965 Vermont's benefit costs amounted to 1.13% of total wages, Texas' benefit cost rate was .46% and Virginia's, 26%. During the same year our Vermont employers paid taxes on $3600 of taxable wages, with a minimummaximum tax rate ranging from 1.1% to 4.1%. Both Texas and Virginia employers paid a minimum-maximum of .1% to 2.7% on a $3000 taxable wage base. The insured unemployment rate in Vermont has been one of the highest in the country, up to a few months ago. One reason for our high unemployment rate may be the fact that we pay benefits on an equitable basis and in reasonable amounts. Our people file for claims because they can receive benefits. As a result they raise the unemployment rate to where it accurately should be. Vermont does not employ the device used in some states of legislating a severely restrictive program of benefit payments, duration and disqualification, so as to discourage the filing of claims, and then report a respectably low unemployment rate. In Vermont, we are not interested in concealing our unemployment, but rather in genuinely meeting the needs of our unemployed. Fortunately, in the last few months our unemployment rates have been low for us, and average as compared to the rest of the country. It appears evident that in a period of high level employment and in the warm weather season, even with an enlightened and humane unemployment insurance program, we can have a low rate of unemployment in this state. We remain convinced that workers, the vast majority of them, will work if they can secure suitable jobs. American workers want to earn the money necessary to support themselves and their families. It is no pleasure to be unemployed and filing every week for unemployment benefits, and to answer questions that under any other circumstances would be considered an invasion of privacy. If my opinions could prevail on this bill, I would modify it to include most of the provisions of the old H.R. 8282. Such a hope is patently impractical. But, at the least, I would like to see an effective insurance program for the long-term unemployed and hard-to-place workers, with an additional twenty-six weeks of benefits. The guaranteed income concept is gaining support across the country. Perhaps there would be less need for an outright gift program if we had an adequate nationwide system of extended unemployment insurance benefits, which would preserve the personal dignity of a working man and encourage him to remain in the labor market rather than become a welfare recipient. Such a program must trigger as to each individual, and not merely in times of general recession. In this country we have always considered the human rights of an individual as being of superior quality to that of the group, except under unusual circumstances. Even under the very best of economic conditions throughout the country or a state, some individuals within the system can have extreme difficulty in securing employment. Unwillingness or inability to work are problems which this program should not and does not attempt to meet. But an adequate program is necessary for those individuals who genuinely seek employment and are physically able to work, but who meet employer resistance and fail to secure employment for a long period of time. The unemployment insurance program is designed for all workers who are unemployed through no fault of their own. This includes those whose capabilities or personalities are not pleasing to prospective employers, so long as they are genuinely seeking employment. Insurance protection for a total of 52 weeks of unemployment is not excessive. Of course, adequate financing would need to be provided, with a higher tax base and tax rate than that proposed in the present bill. A higher tax base approach, as compared to that of a higher tax rate, would appear more equitable as between covered employers in high wage or low wage industries, in relation to unemployment taxes as a proportion of total payroll. In regard to benefit amounts, duration and disqualifications, I would like to urge the adoption of minimum federal standards as a condition for giving full federal tax credit of 2.7% for reduced unemployment insurance rates. It is my position that it is totally unjust to give to a Texas employer who, on the average, pays a tax of .5% of total wages to the Texas Trust Fund, a federal tax rate credit of 2.7%, the same tax credit given to a Vermont employer, who pays an average tax on total wages of 1.4%, unless the provisions in Texas relating to benefit amount, duration and disqualifications meet a minmum standard universally applied and designed to establish a truly effective insurance program. In particular, I urge amendment in the Senate of the proposed bill so as to include the following requirements: 1. That the maximum weeks of employment necessary to be eligible for 26 weeks of state benefits not exceed 20 weeks at a reasonable wage within a one year base period, or equivalent. Such a requirement would appear to be a fair and just test of attachment to the labor market, not only in Vermont, where we have such a provision, but also in the other states as well. 2. That the weekly benefit amount be 50% of the claimant's average weekly wage, up to a maximum, eventually, of 66%% of the state average wage. A low maximum limitation penalizes the wage earner at the higher income level, often the primary wage earner with dependents. His economic commitments in this society are based upon full earnings. To reduce his wage replacement to perhaps one-third or less of the earnings he has counted upon to meet his financial obligations is, from the viewpoint of economic stability purchased with maintained buying power, poor economics. In Vermont our benefits are 50% of the claimant's average weekly wage, up to a maximum of 50% of the State average wage. Although already one of the highest maximums in the country, it should be higher. But, as I have stated, our tax rates are high and our Trust Fund is low. We do not want to legislate our employers out of the competitive market. For that reason we need a federal standard on this matter. 3. That the uniform duration of benefits in the state program be a minimum of 26 weeks, for claimants with at least 20 weeks of sufficient employment. Once reasonable men agree on a proper eligibility requirement of weeks of employment to test attachment to the labor market, then a worker is either attached or he is not attached. Assuming he is attached, he is entitled to full scale benefits for an adequate period of time so as to enable him to secure employment commensurate with his skills and former wages. For the worker who wants to work but who has unusual difficulty in securing employment, twenty-six weeks is little enough grace period before he must further materially depress his standard of living and that of his family. 4. That disqualification, except for fraud, conviction of crime, or labor dispute, be limited to six weeks succeeding the week in which the disqualifying act occurred. While the original unemployment for which a voluntary quit or discharged claimant is disqualified may be due to his own act, we cannot penalize him forever because he cannot or will not work at one particular job. There comes a time when his unemployment is due to general economic conditions or even to lack of ability to secure employer acceptance. If we agree that it is not a proper purpose in disqualifying a worker to punish him, then we should not impose an unlimited or excessive disqualifying period for one act that resulted in a quit or discharge. This amendment would limit the application of the disqualification, but not the causes therefore, which would remain within the legislative and administrative judgments of the states. There is no question but that workers who are voluntarily unemployed should be weeded out of the program and denied benefits. However, under severely restrictive laws that eliminate broad categories of workers, the strength and genuineness of attachment to the labor force of any particular individual apparently is immaterial. What is needed in this program is effective administration at the state level, together with substantial improvement in local office factfinding and decisioning operations, in order to weed out improper claims. It is easier for the administrators in the states, who have the responsibility for administering the program, to function under broadly restrictive laws that exclude everyone in a group. However, that is exceedingly unfair to individuals in the group who are qualified and eligible by reason of proven attachment to the labor force and genuine effort to secure reemployment. If federal standards are needed to ensure equal treatment for all workers regardless of state of residency, then federal standards we must have. The protection from abuses in the program would then depend upon the quality of administration in the states, and this is entirely within state control. If the states would improve their administration of these laws, they could have no valid objection to the minimum standards above referred to. It is a combination of just laws and good administration that is essential to an adequate unemployment insurance program. It must be recognized that the proposed bill is the result of long and careful study by experts in the field, after serious effort to compromise diverse but sincere opinions on the issue of the extent to which a particular state ought to be free to establish an unemployment insurance program, regardless of its effect on other states or whether or not it meets the social needs of its people. It may be that, if the proposed bill is passed in its present form, the entire matter of the unemployment insurance program in this country will not again receive the serious attention of Congress for several years. Therefore, it is vitally important that major improvements necessary, but now omitted from the proposed bill, be fully considered and adopted at this time. Mr. Chairman and gentlemen, I thank you for your consideration and for permitting me to make this presentation. Senator DOUGLAS. I will now adjourn this meeting until Monday morning at 9 o'clock. (Whereupon, at 12:50 p.m., the committee adjourned, to reconvene at 9 a.m., on Monday, July 18, 1966.) UNEMPLOYMENT INSURANCE AMENDMENTS OF 1966 MONDAY, JULY 18, 1966 U.S. SENATE, COMMITTEE ON FINANCE, The committee met, pursuant to recess, at 9:40 a.m., room 2221, New Senate Office Building, Senator Herman E. Talmadge presiding. Present: Senators Talmadge, Hartke, and Williams. Senator TALMADGE. The hearing will come to order. Our witnesses this morning generally have special situations they wish to discuss with the committee. The special situations are not so much concerned with the question of Federal standards or the level of the benefits so much as they are with questions of coverage and exclusions from coverage. Our first witness this morning is Dr. Robert J. Bernard, representing the Association of Independent California Colleges & Universities. Dr. Bernard, will you step forward and take the stand and proceed. STATEMENT OF DR. ROBERT J. BERNARD, EXECUTIVE DIRECTOR I am the executive director of the Association of Independent California Colleges & Universities and chairman of the board of trustees of Pitzer College, the six institutions in the Claremont group of colleges at Claremont, Calif. You have before you, in addition to a longer statement, a twopage statement which I would like to present at this time. The Association of Independent California Colleges & Universities, representing 49 accredited 4-year institutions, urges Congress to evaluate compulsory coverage under the unemployment insurance law in terms of the financial impact on the Nation's colleges and universities. Operating costs are only partially covered by the tuition which is already formidable, and with rising costs of higher education and an enormous increase in the number of college sudents to be served, it is not surprising that our independent insti tutions confront serious financial difficulties. Hence, we believe that every added cost needs to be very carefully weighed before it is imposed. You have also before you, members of the committee, a guidebook of the independent institutions, and on the pages in that guidebook you will find the tuition charge on the amount of costs per student. The amount of costs per student is, with one exception, very much above the tuition charge. It runs as high as three or four times its tuition charge and is usually at least twice the tuition charge. If, however, the benefits to be provided are believed by the Congress to be a justifiable diversion of funds which would otherwise be used for educational purposes such as faculty salaries, scholarships, books, scientific equipment, and necessary operating expenses, this association would respectfully submit the following suggestions concerning H.R. 15119. May I interpolate here on this observation that when we speak of diverting funds that an institution might use for scholarships we are considering a very important part of every college's responsibility, and we cannot get nearly enough money for the scholarships that are needed. For example, in the State of California there were recently awarded 2,600 State scholarships, and there were over 22,000 applications for the 2,600 scholarships. Now, I would like to go to the first point of the memorandum. We believe that student spouses should be excluded from coverage. Spouses are usually employed to help the student through college, and jobs in college libraries and offices are often developed for such spouses as an integral part of the student aid program. When the student graduates and he and his spouse leave the campus, he is usually employed and assumes the financial obligations of the family. After the college has done its part in supplying the spouse a job while the student is in college, it would hardly seem appropriate for the college also to have to bear an added expense for unemployment compensation after the family leaves college and the husband is employed. 2. The exclusion from coverage contained in section 104 (b) relating to persons in a principal administrative capacity should be more clearly defined so that proper guidelines can be drawn for State action. We recommend language which would define principal administrative capacity in terms similar to those employed in section 711(b) (6) of the California Unemployment Insurance Code which, for example, refers to the exclusion of deans, counselors, registrars, and similar personnel. Under the present wording of the bill, a head librarian is excluded, but a reference librarian, periodicals librarian, government documents librarian, and similar major personnel with profes sional training and background and permanence of employment would not be excluded. The same would be true of bursars and accountants in a college business office. We believe it is essential that the language of this section be more fully developed. 3. Section 104(b) should exclude from coverage service performed by professional individuals such as physicians, dentists, etc., with respect to employees of colleges and universities in health centers or clinics. An exclusion is in the legislation for similar employees of nonprofit hospitals. The college doctors in the health service, the dis |