Hon. RUSSELL B. LONG, NATIONAL INDUSTRIAL DISTRIBUTORS' ASSOCIATION, Chairman, Finance Committee, U.S. Senate, Washington, D.C. Philadelphia, Pa., June 13, 1966. MY DEAR MR. SENATOR: I understand your Committee has under consideration Bill S. 1991 which would tend to federalize the States' Unemployment Compensation Systems. Enclosed is a resolution unanimously adopted at our 61st Annual Meeting in New York City opposing passage of this bill. Our Association represents 533 distributors of industrial supplies and equipment including the largest in the country and we hope you will keep our views in mind when considering this legislation. Yours very truly, ROBERT G. CLIFTON, Whereas, Congressional bills H.R. 8282 and S. 1991 would establish Federal control over the State Unemployment Compensation Systems thereby adding to centralization of governmental authority, and Whereas, this proposed legislation would drastically increase employers' unemployment compensation taxes, require large increases in state unemployment benefits, encourage states to eliminate experience ratings from their unemployment compensation tax structures, require states to establish a minimum of 26 weeks entitlement for benefits and cause many other detrimental effects, and Whereas, hearings on H.R. 8282 will be scheduled in the near future by the House of Representatives' Ways and Means Committee, therefore be it Resolved, by Members of the National Industrial Distributors' Association in Convention assembled this 25th day of May, 1966, that we hereby express our firm opposition to the purposes of this legislation, direct that copies of this Resolution be officially forwarded to Congress and urge Members to express their individual views on these bills to their Senators and Representatives. NATIONAL INDUSTRIAL DISTRIBUTORS' ASSOCIATION, Philadelphia Pa., June 27, 1966. Hon. RUSSELL LONG, MY DEAR SENATOR LONG: Thank you very much for your letter of the 21st requesting our opinion of legislation that may be introduced in the Senate similar to H.R. 15119. Although I understand H.R. 15119 was adopted by the House of Representatives by a substantial majority, it is the opinion of our Members that any extension of Federal control of the States' Unemployment Compensation Systems is unnecessary and unwise. For this reason, we remain opposed to H.R. 15119 as we did the original Bill, H.R. 8282. Your consideration of our views will be sincerely appreciated. ROBERT G. CLIFTON, AMERICAN TEXTILE MANUFACTURERS INSTITUTE, INC., Washington, D.C., July 7, 1966. Senator RUSSELL B. LONG, Chairman, Senate Finance Committee, DEAR SENATOR LONG: It is our understanding that the Senate Finance Commitfee will begin hearings on the House-passed Unemployment Insurance Bill, H.R. 15119, on Wednesday, July 13, 1966. The textile industry, one of the nation's larger employers of people, always has been vitally interested in the maintenance of a strong and sound Unemployment Compensation system, one that gives adequate protection to the rights of employees and, at same time, helps stabilize employment. When hearings were held on the House side, a witness for this organization appeared and presented testimony setting forth the position of our industry. This position in many respect paralleled the Bill which finally was reported by the House Ways and Means Committee, later to become enacted so overwhelmingly by the House. In view of the foregoing, it does not seem indicated that we should request an appearance before your busy Committee to reiterate our position. Rather, we employ this means to go on record in support of H.R. 15119 as passed by the House, without amendment. We shall appreciate your making this letter a part of the record of the hearings. Respectfully, J. BURTON FRIERSON, President. Mr. TOM VAIL, SOUTH CAROLINA EMPLOYMENT SECURITY COMMISSION, Chief Counsel, Senate Finance Committee, New Senate Office Building, Washington, D.C. DEAR MR. VAIL: The South Carolina Employment Security Commission has carefully reviewed the provisions of H.R. 15119, The Unemployment Insurance Amendments of 1966, and wishes to go on record as favoring the enactment of this Bill without amendments. Sincerely yours, Hon. RUSSELL B. LONG, B. F. GODFREY, Executive Director. AMERICAN HOSPITAL ASSOCIATION, Chairman, Finance Committee, Senate Office Building, Washington, D.C. DEAR SENATOR LONG: This statement is sent to you to express the views of the American Hospital Association in respect to H.R. 15119, "a bill to extend and improve the federal-state unemployment compensation program." We have at various times, on behalf of the great majority of the hospitals of the nation, expressed our opposition to the compulsory inclusion of nonprofit hospitals under the unemployment compensation law. The reasons for this position are that operation of the nation's hospitals produces only a negligible risk of unemployment for hospital employees. This risk of unemployment does not justify adding millions of dollars in unemployment compensation payments to the public's annual hospital bill. The hospital insurance program enacted in Public Law 89-97 creates a federal financial responsibility for at least 25 percent of all hospital bills. The cost of hospital care to these medicare patients will be increased by the legislation before you. We believe that hospital employees would be better served by directing such sums, derived from government as well as from all other sources of patient revenue, towards salary improvement. We believe H.R. 15119 is a definite improvement over previous legislative proposals in that it relieves hospitals from contributing to unemployment taxes to pay for unemployment in other industries and, further, in that the states are prohibited from imposing their regular rate of tax upon nonprofit hospitals. Nevertheless, there are still aspects of this bill that will contribute unjustifiably towards increased hospital costs which we wish to bring to your attention. An examination of the turnover and unemployment situation in nonprofit hospitals reveals a high rate of voluntary separation of employees and a rather low level of involuntary departures. (See attached charts.) We fear that many of the voluntary separations would, in a number of states, qualify for unemployment compensation benefits either immediately or after a waiting period. The administration of unemployment compensation programs varies from state to state. We believe that in some states a separation because of pregnancy would entitle an employee to unemployment benefits, as would quitting to marry, to leave the state, to obtain a better job, or for other rather personal reasons. In the area of involuntary separations, which average about 7 percent of total personnel, there are a number of reasons for discharging an employee which hospital management would consider to be just cause and not meriting any un employment compensation benefits. Yet, in many states, we understand that discharge for dishonesty, drunkeness on the job, disregarding hospital rules, behavior which endangers others and similar causes would not prevent the discharged employee from obtaining compensation. It is these variable aspects of the administration of the program which perturb the hospital field. We feel that hospitals will be obligated to pay for unemployment compensation benefits in many instances when the employee is discharged in order to protect the health and safety of patients or where the employee chooses to leave for his own personal desires. Thus, even a self-insured program can prove to be unjustifiably expensive to hospitals and to those who pay for hospitalization. We trust the committee will bear in mind this concern of hospitals as employers. We appreciate the opportunity of bringing the views of the American Hospital Association to your committee and request that this statement be made a part of the record of the hearings on this legislation. 1 All voluntary separations constitute 37.98 percent of total personnel. centages of that figure. Statistics are for the year 1962. 19. 2 1 100. 0 These are per 1 All involuntary separations constitute 7.88 percent of total personnel. These are percentages of that figure. Statistics are for the year 1962. STATEMENT OF GEORGE S. BULLEN, LEGISLATIVE DIRECTOR, NATIONAL FEDERATION OF INDEPENDENT BUSINESS The National Federation of Independent Business is a national organization composed of more than 217,000 independents in all phases of commercial enter prise and the professions throughout the 50 States. As you probably know, our policies are determined by direct poll of the members-the majority vote on each issue being the deciding factor. Our membership is a representative cross section of the Nation's entire business community at the retail, wholesale, manufacturing, servicing, and professional occupation levels. The majority position of this large membership, distributed in all the States and so representative by type or trade of all the Nation's 4.7 million small businesses should carry extra weight inasmuch as it no doubt fairly accurately reflects the opinion of all independents. The independents or small businesses account for more than 30 million employees. They are vitally concerned over the legislation before you. In addtiion to policy-setting polls, we conduct yearly fact-finding surveys and, at the request of Members of Congress or Commitees, special surveys. In one section of last year's fact-finding survey ("Small Business-The Nation's Largest Employer") our members were asked if they had expanded during the past twelve months, and how many (if any) new job openings resulted. 70,700 responses were received. We all know small business is an essential vibrant part of our economy and that one of our prime national goals is the production of new job openings for our growing population and to reduce unemployment. In this connection, studies of our survey show that during the past year, projecting our representative rates to the entire American small business community, as many as 1.5 million smaller businesses created over 3 million new job openings. Obviously, anything that would affect the opportunity climate enjoyed by small business, such as the burdensome cost upon employers of increased tax rates, increased wage base and increased coverage for unemployment compensation, would ultimately affect our national economy and its goals. From the time of our founding in 1943, the Federation has polled its members on fifteen separate occasions on "amending the Federal Unemployment Statutes" concept or closely allied issues. Each time, our members, by very large majorities, have either opposed expanding the Federal-State unemployment system or voted that employees should pay a share of unemployment compensation payroll taxes. While we have not taken a policy-setting Mandate poll on H.R. 15119, a poll was conducted in Mandate No. 308 on H.R. 8282, introduced by Mr. Mills of Arkansas (Expand the Federal-State Unemployment Compensation System). In this poll we stated the issue as follows: 5. H.R. 8282. A bill to expand the Federal-State unemployment compensation system. (Cong. Mills, Ark.). Under this, about 5 million more workers would come under the law. The States would pay benefits for 26 weeks, and the Fed'l Gov't could continue payments for another 26 weeks. Firms with one or more workers would be brought into the system. Following are brief arguments "FOR" and "AGAINST", which our members were asked to read before voting: 5. Argument for H.R. 8282: Supporters of this bill say revisions are necessary "to meet the changed needs of a changed economy." The original law was aimed to cope with short-term unemployment, whereas in an economy experiencing rapid technological change, increasing skill demands and constant shifting of work requirements, longterm unemployment becomes a more dangerous risk. Thus, long-term unemployment should be covered by insurance at least as fully as short-term joblessness. Moreover, existing benefits are far too low, in many cases. to meet essential living costs. ... 5. Argument against H.R. 8282: This bill would double employers Fed'l and State unemployment taxes and increase the present taxable wage base from $3,000 to $6,600 by 1971. Every State would have to pay at least 26 weeks benefits for no more than 20 weeks work . . . and pay 26 weeks more benefits directly directly from Fed'l funds. The bill would compensate not only workers who lost jobs, but those who voluntarily quit, those properly discharged for misconduct and those who refuse to accept suitable reemployment. This was not the aim of unemployment compensation as original proposed. They are Now, as to the bill before you there is no question that the small businessmen of this country, who are the Nation's largest employer, are greatly concerned over the proposed increases in tax rate, wage base and coverage. alarmed that passage of the bill could trigger a reverse in the trend of small business to provide jobs. The proposed tax constitutes a definite deterrent to the hiring of new employees, and to the establishment of new businesses. At the same time it could prove an insurmountable added burden upon those businesses which are finding it difficult to survive. We believe that too liberal unemployment compensation benefits tend to foster unemployment, and would lessen the incentive to seek, obtain, and retain employment. We feel that it is far more desirable to provide employment to promote self-respect and independence in the employee group than to encourage idleness by increasing unemployment benefits. We can see no reason to federalize, to a greater extent, State programs that have been doing an adequate job. Finally, it seems to us that the bill is out of keeping with our traditional relationship between States and the Federal Government. While we feel H.R. 15119 is less objectionable than H.R. 8282, we remain opposed to any expansion of the Federal-State unemployment compensation system. If an overhauling of the unemployment insurance system is required, our members have voted in favor of Congress requiring workers to pay a fair share of the taxes. Unemployment compensation is a benefit for employees-it protects them against want while they are out of jobs looking for work. It is only right then that they should at least pay part of the taxes that support the program, in the same manner as for their insurance programs. Furthermore, by paying part of this tax, they would gain a greater sense of responsibility in their own jobs and in discouraging "free loaders" who try to ride unemployment compensation as long as possible. TOM VAIL, Esq., STATE ADVISORY COUNCIL ON EMPLOYMENT AND UNEMPLOYMENT INSURANCE, Chief Counsel, Committee on Finance, DEPARTMENT OF LABOR, DEAR MR. VAIL: I wish this letter to be considered as a written statement for inclusion in the printed record of the hearings on H.R. 15119 in lieu of my personal appearance as a witness at the hearings. The New York State Advisory Council is a statutory body composed of nine members, appointed by the Governor of New York for 6-year staggered terms. The Advisory Council, under statutory mandate, reports annually its recommendations and findings to the Governor and the Legislature of New York State, and it advises the New York State Labor Department on legislative and administrative matters in connection with the employment security program. Three of the members represent labor; three, management; and three, the public. Among the public members are the President of St. Lawrence University, a |