Section 3303 (a) (1) now provides that an additional credit with respect to a reduced state rate of contributions shall be allowed only if the Secretary of Labor certifies that no reduced state rate is permitted to the employer "except on the basis of his *** experience with respect to unemployment or other factors bearing a direct relation to unemployment risk during not less than the 3 consecutive years immediately preceding the computation date". Section 208 of H.R. 8282 would amend Section 3303(a) of the Code to permit the additional credit against federal tax if state law permits a reduced rate of contributions, defined as a rate lower than 2.7%. In direct conflict with the salutary principle of encouraging and giving recognition to stability of employ ment, this proposed change in the law would eliminate experience rating as a prerequisite for additional credit against federal tax without substituting any other specific test. Against the background of other provisions in H.R. 8282 which would increase the cost of state unemployment compensation plans, elimination of the present federal requirement that additional credit will be allowed only where the reduced state rate is attributable to a good employment record would have the inevitable tendency of causing states to reduce the present wide differences in rates which turn upon the demonstrated unemployment risk, or even to impose a flat rate of tax on all employers. Section 208 of H.R. 8282 would not eliminate the incentive to states to permit a rate somewhat less than 2.7%, since they would still have an interest in qualifying employers within the state for "additional credit" against federal tax. The necessity of collecting sufficient unemployment taxes to meet the increased benefit costs which would be caused by H.R. 8282 would create pressure on the states to shrink greately the present differences in rates based on experience rating. The American Electric Power System companies pay unemployment taxes in eight states. They have had a very stable employment record. High benefit payments were made from many of the funds in these eight states in the recent past, and some of these funds are not yet back to a satisfactory level. Nevertheless, the taxes paid in these states last year by the AEP System companies reflect the stable employment record of our companies. For the year 1964, state unemployment taxes paid by AEP System companies totaled $162,281. If our companies had paid a rate of 2.7% in each of the eight states, applied to the maximum taxable wage base, $3,000 in most of such states and with a high of $3,600, our state unemployment taxes would have been $959,097, or almost six times the taxes actually paid. Unemployment is a matter of national concern, and in this connection the maintenance of as stable an employment record as possible by individual employers is of great importance. Present Section 3303(a)(1) has furnished employers a very real financial incentive to strive for an increasingly smaller number of lay-offs and other terminations of employment. Section 208 of H.R. 8282 would remove this incentive. The elimination of experience rating would be detrimental to the national objective of reducing unemployment and employee turnover. It would be unfair to those employers who have striven to maintain stable employment. It would be a sharp and undesirable departure from the principle hitherto fol lowed of furnishing a financial incentive toward that end. Section 208 of H.R. 8282 should not become law, and we urge its deletion from the bill. Very truly yours, DONALD C. COOK. ESSEX-WEST HUDSON LABOR COUNCIL AFL-CIO, Hon. RUSSELL B. LONG, DEAR MR. LONG: We urge your support for a strong U.C. Reform Bill and propose that your Committee revise the weak House Bill that has been passed. We need your immediate cooperation and support to approve the U.C. Reform Bill recommended by the AFL-CIO H.R. 8282. May we request that our letter be printed in the record of the Committee hearings. Sincerely yours, MATTHEW J. STEVENS, Executive Secretary-Treasurer. Hon. RUSSELL B. LONG, Chairman, Committee on Finance, U.S. Senate, Washington, D.C. MAINE STATE FEDERATED LABOR COUNCIL, Bangor, Maine, July 21, 1966. DEAR SENATOR: I wish to take this opportunity to go on record concerning a matter of great significance to the working men and women of the State of Maine. As President of the Maine State Federated Labor Council, unemployment compensation is an area in which I have always taken a great interest. After extensive research and thirty-one years of legislative experience, I find that there are limitations and inequities in the Maine Employment Security Act which indicates to me a need for federal standards and broad reforms if the law is to realistically serve the purpose for which it was originally intended. The Maine State Legislature is not qualified to delve into and solve problems encountered in unemployment compensation legislation. They have neither the personnel nor the research staff and facilities to act upon legislation concerning unemployment compensation, yet the legislative juggling continues and the ball is being dropped. Constantly. The recommendations of the Maine Employment Security Commission and the legislation based upon those recommendations are too one sided and do not adequately protect the worker. The worker needs fairer consideration and only uniform federal standards will give it to him. The Social Security Act of 1935 made each state responsible for its own unemployment insurance program. After reviewing the record, I was astounded to find that not only Maine, but every state has a smaller weekly benefit, relative to wages, than was the case in 1939. At that time benefits received by the unemployed worker in Maine amounted to 70% of his wage. Today the figure is closer to 30%. This seems grossly incompatible with the needs of the people. After twentyseven years it seems we should have made more progress than that in protecting the earnings of our workers. The need to stop the competition and apply federal standards for the amount of weekly benefits is obvious. A further glaring inequity may be found in the duration of benefits received. In 1959, 20%, or 6415 unemployed workers in the State of Maine exhausted benefits. This was an increase of 134% over the previous year. The 20% exhaustion rate of 1959 continued until the 1964 upsurge of the economy. Although benefits in Maine presently cease after a maximum of twenty-six weeks, valid complications cause many workers to remain unemployed after the cut off period. The only alternative has been the relief rolls. We need federal standards for the duration of weekly benefits and an additional twenty-six weeks of federal benefits if we expect to adequately meet the needs of the unemployed worker and his dependents. In speaking and corresponding with rank and file union members I have obtained information which I feel should illustrate some of the personal disaster suffered by individuals in the State of Maine, due to the present standards of disqualifications. What is distressing is not only the number of disqualifications, but the reasons. In one instance a pipefitter from Norway, Maine, was disqualified for simply telling the truth. Unemployed, the worker was referred to work in Bucksport. Unable to leave his wife, a victim of emphysema for fifteen years, he declined. When applying for unemployment compensation, the worker answered truthfully when asked if he had been offered employment. He was disqualified. Although the individual had good personal cause, his truthfulness disqualified him. The present law has undoubtedly made liars out of good men who are fearful of a similar occurence. In Skowhegan, Maine, a young woman working for a supermarket chain wrote me asking what she could do about being disaqualified. She had re-located, at the request of the company, in Augusta. After two weeks, due to her childs illness, she had to resign and return to Skowhegan. She was disqualified. Some of the letters I have received express not only the hardships imposed upon disqualified workers, but the workers inability to comprehend why the people who need it most are denied this compensation. They feel unemployed poor personally discriminated against and too often for good reasons. It is my hope the committee to the Senate will recognize the needs of the unemployed and not allow them to be utilized merely as pawns in the competitive world of industry. I feel it only just that in this, the greatest nation on earth, the unemployed worker should have a better alternative than hunger or despair. I, therefore, urge the approval of the strongest possible unemployment compensation reforms. It is high time that pressing needs of the working men and women of this nation are realized and met. In this, an age of transition, we must not forget the human factor. It we do we perpetrate a grave injustice against this nations greatest asset, its workers. Most sincerely, BENJAMIN J. DORSKY, President. MISSISSIPPI AFL-CIO, Jackson, Miss., July 19, 1966. Hon. RUSSELL B. LONG, Chairman, Committee on Finance, U.S. Senate, Washington, D.C. DEAR SENATOR LONG: I have recently been advised that the Senate Finance Committee is currently conducting hearings on proposals for unemployment compensation reform. Specifically, I understand that your committee is presently considering SB 1991 which provides federal minimum standards. Please be advised that the Mississippi AFL-CIO is in favor of this bill and urges your Committee to give it a favorable report. Many unemployed workers in this state are consistently denied compensation under the existing law and the only way this can be overcome is to strengthen the Federal Act. Employer and other groups in Mississippi have succeeded in virtually emasculating the Employment Security Act in recent years. All of this has been done under the guise of making the state more attractive to industry. The gimmick is low tax rates. In order to keep tax rates low, weekly benefits are held down and workers are denied compensation for various and sundry reasons. Frankly, we feel the only answer to this problem is to strengthen the Federal Law. We certainly hope your Committee can come out with a bill that will eliminate these evils at the state level. I will be happy to furnish your Committee with affidavits of individuals who have been victimized, if such a need exists. I would also like to request that this letter be made a part of the record. Sincerely yours, CLAUDE RAMSAY, President. TRANSPORT WORKERS UNION OF AMERICA, Hon. RUSSELL B. LONG, Chairman, Committee on Finance, DEAR SENATOR LONG: On behalf of the Transport Workers Union of America, AFL-CIO, I wish to go on record as strongly supporting the enactment of H.R. 8282 and its companion Bill S. 1991 in order to provide urgently needed improvement in unemployment compensation benefits to millions of workers throughout the United States. Our Union represents many thousands of workers employed on local passenger transportation systems, airlines, railroads, public utilities, universities, and related industries, situated in many different states throughout our country. We know from firsthand experience that existing unemployment compensation laws are grossly inadequate. In most states, unemployment compensation laws are obsolete and reflect a system of benefits designed to meet the standard of living of the era of the Great Depression in the 1930's. Such benefits have not kept pace with the huge increase in living costs and do not reflect credit on our Nation in the era of the Great Society. In recent years, automation has had a sharp impact on the industries represented by our Union as well as upon other major industries in the United States. Some of the ravages of automation can be lessened and the economic plight of affected workers alleviated through the enactment of H.R. 8282. I do not suggest that enactment of H.R. 8282 will eliminate all of the economic dislocations and hardships resulting from unemployment. However, this Bill does represent a step in the right direction and constitutes the minimum measure necessary to correct long-standing inequities in the administration of unemploy ment compensation benefits throughout the United States. Very truly yours, MATTHEW GUINAN, International President. Hon. RUSSELL B. LONG, KANSAS STATE FEDERATION OF LABOR, AFL-CIO, Chairman, Committee on Finance, DEAR SENATOR LONG: The officers and members of the Kansas State Federation of Labor are extremely interested in legislation that will establish minimum standards in unemployment compensation and in improving some of the benefits the unemployed worker so properly deserves. We earnestly appeal to you to lend your support to S. 1991, the bill that was introduced by Senator Eugene McCarthy and fifteen other senators. Our members who work in more than one state continuously involved with variations of the Unemployment Compensation Law, in each of the states where they have experience. A few of the variations are: qualifications for benefits, variation in the amount of compensation allowable, disqualification variations, number of weeks of eligibility, and the inadequate amount of benefits provided as compared to the loss of income. The bill introduced by Wilbur Mills, HR 8282, provided for minimum Federal standards and improvements in the law that we subscribe to, although the bill that passed the House was so watered down that it is totally inadequate. We are therefore trusting that the Senate Finance Committee of which you are Chairman will report a bill to the Senate Floor which will provide broader coverage to include employers with one or more employees; workers in non-profit institutions; establish a formula for raising the maximum benefit to % of the average weekly wages of the respective states; extend the benefit period by an additional 26 weeks; provide uniform methods of qualification; and standardize or make uniform disqualification penalties in cases where the worker quit voluntarily, was discharged for misconduct or refused suitable work. Surely the Congress will give these needed amendments favorable consideration which would eliminate the jungle of confusion that the present 50 laws create nationwide. The unemployed worker is dependent upon the U.S. Senate and House of Representatives for improvement in our Unemployment Compensation Laws due to the failure of the respective states to assume the responsibility through legislative procedures of working out any guide of uniformity between the states and keeping the maximum benefits in pace with the economy, and extending the benefit periods to correspond with the needs of unemployed persons. I hope these remarks will be carried in the record of the hearings for your committee. Respectfully yours, F. E. BLACK, Executive Secretary. AMERICAN FEDERATION OF MUSICIANS OF THE Hon. RUSSELL B. LONG, Chairman, Senate Finance Committee, DEAR MR. CHAIRMAN: Permit me to address you and your conferees--for the record of the current hearings on S. 1991-in behalf of the approximately 250,000 members of the American Federation of Musicians, AFL-CIO. Our musicians, by the very nature of their transient employment, are among the most adversely affected workers coming under present provisions of the unemployment compensation act. We sorely need the reforms proposed in the 65-992-66- -47 bill introduced by Senator McCarthy and 15 co-sponsors. I stress, on behalf of this, the largest of all entertainment unions, the dire need for uniform Federal standards, for the weekly benefits as set forth in the so-called McCarthy proposal, and for the specified duration, plus a minimum of 26 weeks of extended Federal unemployment compensation benefits. These reforms are minimal to satisfy a crying need for modernization of the basic principles of job insurance and protections. Our musicians were among the first to feel the damaging impact of automation, and we have always been and shall be subjected to shifting venues of employment. Therefore, may I cite for the record urgent need of the added job protections, as proposed. May I ask, Mr. Chairman, that you include this petition for relief by all professional musicians, as a part of the record of the current unemployment compensation hearings. Sincerely, HERMAN KENIN, President. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, Hon. RUSSELL B. LONG, Chairman, Committee on Finance, Washington, D.C. DEAR SENATOR LONG: This is to state the position of the IBEW, which represents more than 820,000 members, on the very important Unemployment Compensation issues now before your Finance Committee. Members of the IBEW have not been exempt from the excessive unemployment that has plagued our country in the last several years. Many of them, faced suddenly with loss of employment, have been hard put to support their families on the totally inadequate Unemployment Compensation benefits available to them in their states. And in too many cases, even these inadequate benefits have been exhausted before they were able to return to work. On their behalf and on behalf of all working men and women I want to make this statement in strong support of a meaningful Unemployment Compensation bill, such as S. 1991, which will provide a fair measure of protection for the unemployed. I ask that this communication be made part of the record of the Committee hearings now in progress. First, we favor the broader coverage in the bill which would extend protection to five million workers now denied any Unemployment Compensation benefits at all. We urge approval of uniform Federal standards providing minimum benefits equal to two-thirds of the state's average weekly wage for not less than 26 weeks. plus an additional 26 weeks of extended Federal benefits for the long-term unemployed with a record of firm attachment to the labor force. Federal standards will put the states on a more even basis. Workers in similar situations will be treated more equitably regardless of which state they live in. And the difference in state tax rates due to the uneven quality of state laws would be narrowed. This would discourage states from trying to improve their position for industrial development by sacrificing their unemployment insurance systems We feel the tax base should be raised substantially, since it now covers only about half of payrolls. One reason the unemployment insurance system is short of funds is because of the out-dated taxable wage base, which has not been changed since 1939. Finally, we feel that states should not be allowed to withhold benefits longer than six weeks in cases of disqualifying acts. After that time they should have to reexamine the case to see if the worker is still voluntarily unemployed. If he is able to work, available for work and seeking work, he should then be entitled to benefits. The provisions of S. 1991 are long overdue amendments necessary to strengthen the unemployment insurance program. Because of all the present limitations in coverage, benefits and eligibility we feel that our members do not have as good protection now as they did many years ago when this program was in its infancy. Wage insurance today compensates a much smaller proportion of the unemployed worker's wage loss than it once did. |