In every case the worker has earnings in three quarters. In every single one of these cases the worker cannot qualify in Virginia but he could qualify in all surrounding states and in most other states of the United States. To disqualify workers with this amount of earnings, spread over so large a part of the year, is to make a mockery of unemployment insurance. I hope the committee will study these records because they show clearly the need for federal standards on the earnings qualifying requirements. In all these cases if S.B. 1991 had been in effect and Virginia were in compliance, these individuals would have qualified for benefits, as indeed they should under any fair definition of attachment to the labor force. In closing may I thank this committee for allowing us to submit this statement in support of Senate Bill 1991. Sincerely yours, Hon. RUSSELL B. LONG, H. B. BOYD, President. WEST VIRGINIA LABOR FEDERATION, AFL-CIO, Chairman, Committee on Finance, U.S. Senate, DEAR SENATOR LONG: On behalf of the workers of West Virginia, I want to briefly plead the case for realistic and much needed reforms to the Unemployment Compensation Act. I know of no other piece of state legislation which so vitally affects wage earners and to which this Federation has directed more effort toward trying to improve over the past ten years than unemployment compensation; yet, as the record will show, to little avail. What began as a wage-related benefit has now become little more than a token effort to replace a minor percentage of the worker's wage. The following table is ample proof of the deteriorating quality of the wage loss concept in West Virginia since 1940. Average weekly wage replaced by maximum unemployment compensation weekly benefit-1940 to 1965 in 5-year increments It is quite evident from these figures that the percentage of average weekly wages replaced by the maximum weekly benefit has decreased by 25.8 percent in the past twenty-five years. If the current average weekly benefit of approxi mately $24 is used in this computation, then the decrease would obviously be much more severe. Needless to say, the average worker who is laid off through no fault of his own can expect to decrease his living standard and that of his family by a staggering 67.8 percent. We believe this sacrifice is too great for innocent victims of a fluctuating economy or technological change to endure. In addition, it fails to provide the buying power that may be badly needed to bolster a sagging economy was the case in West Virginia in the late fifties and early sixties. The second point which vitally affects the workers in our state is duration of benefits. Currently, the state act provides for twenty-six weeks at the benefit level for which the worker qualifies. Under the conditions which prevail in West Virginia and throughout most of Appalachia, this time is simply not adequate to provide protection against the economic hazards of unemployment. The changing technology of old established industries and the technical and skill requirements of new industries in our state frequently deprive older workers with an obsolete skill and young workers with no skill of employment opportunities for many months and years. Thus, many proud workmen who have made a substantial contribution to the economic development of the state and nation are forced to accept jobs below their capabilities or depend on gratuitous help. Such alternatives offer little hope to either the old or the young and certainly cannot in the long run be good for the economy. More time is needed for workers in this category to develop their own alternatives or for the economy to respond to other factors and forces. The third point on which I would like to comment is the extension of coverage to thousands of workers in West Virginia not now covered. Over the years, hundreds of calls have been received in my office by workers who had been denied benefits because their employers were not covered. There can be no sound social or economic reason for denying coverage to any worker who is part of the permanent workforce and who depends on his wages to feed, clothe and house his family. The time for relegating these workers to second class citizenship is long passed and we would hope that Congress, in its wisdom, will end this inequitable condition. There are other sections of the proposed legislation dealing with funding, disqualification, etc. which, if enacted, will correct several inequitable and unrealistic provisions of the West Virginia Act. We would urge favorable consideration of these proposals also. We respectfully request that the Committee give every consideration to the humane aspects of this legislation as well as the economic and that this letter be made a part of the record of the Commitee hearings. DEAR SENATOR LONG: In behalf of the membership of the AFL-CIO and other trade unionists in Missouri, we desire to express some opinions on and improvements in the unemployment compensation program. We hope that you will incorporate provisions in the bill before your Committee that will improve the program of employment security throughout the several states. First, we think there is a definite need for some uniform standards that will provide at least a minimum of assurance to unemployed persons that when they are out of work, through no fault of their own, and actively and earnestly seeking work, they would receive benefits during the period of their unemployment and related to their earnings while employed. Unfortunately, unemployment benefits in Missouri do not bear much resemblance to the earnings of the worker. Secondly, we think the present program should eliminate a fixed dollar ceiling and replace that with a variable benefit formula based on a percentage of the worker's earnings. We think this percentage should be 66% percent. Average weekly wages in Missouri under employment security is $111.39. We have a ceiling of $45, but the average weekly benefit paid is less than $38, slightly more than 33% percent of the average weekly earnings. Third, we think there should be a uniform duration of weekly benefits. Fourth, we think there should be an extension of benefits made possible through a federal fund, beginning with the 27th week of unemployment that would extend to the 52nd week of unemployment. Such long term benefits are necessary where jobs disappear through automation, or plant transfer. Further they would be helpful to the economy in recession periods. We earnestly hope that your Committee will give serious consideration to the above subject matter by incorporating same in a bill. With best wishes, I am Respectfully yours, JOHN I. ROLLINGS, President. STATEMENT OF TYRE TAYLOR, GENERAL COUNSEL OF THE SOUTHERN STATES INDUSTRIAL COUNCIL At a meeting held at Sea Island, Georgia, on May 23-25, 1966, the Board of Directors of the Council unanimously reaffirmed the following statement: "Unemployment and Workmen's Compensation. The states should have latitude in the solution of unemployment problems peculiar to their localities. The Council strongly opposes any federalization of the unemployment program or Workmen's Compensation program, including federal payment of benefits or the imposition of Federal standards for the payment thereof." We should like to concede at the outset that the bill passed by the House (H.R. 15119) represents many and great improvements over the administration bill (H.R. 8282). For example: The administration bill would have established Federal benefit standards, both with respect to amount and duration, to which all state systems would have been required to conform. The administration bill would have prohibited a state from disqualifying a worker from receiving benefits for a period longer than 6 weeks, except for extreme cases, limited to the filing of a fraudulent unemployment insurance claim, the conviction of a crime in connection with his work, or a labor dispute. A worker could no longer have been disqualified from benefits for misconduct on the job, voluntarily leaving his job, or a refusal to accept suitable work. In such cases, the maximum penalty was a suspension of benefits for 6 weeks. In the administration's bill the experience rating system-essential to the insurance concept-would no longer have been required as a basis for granting the credit against the federal tax. All of these proposed changes were rejected by the House. H.R. 15119 does not prescribe benefit standards, or make any substantial change in the provisions with respect to disqualification. States are permitted to etsablish benefit and eligibility standards without federal control. The experience rating concept is retained. For workers who exhausted 26 weeks of state benefits, the administration's bill automatically provided an additional 26 weeks of benefits irrespective of the state of the economy. For 20 weeks of work, a worker could receive 52 weeks of unemployment compensation. The unemployment insurance system would have been converted from an insurance program-where benefits are related to the amount of covered wages-into a welfare program. The Committee bill provides for 13 weeks of extended unemployment compensation during periods of recession, either within the state or nationality. Perhaps the most constructive departure of all from the administration's bill is the provision for judicial review of determinations by the Secretary of Labor with respect to the qualifications of state plans of unemployment insurance. For the first time a state, threatened with the loss of the tax credit by arbitrary action on the part of the secretary, is permitted to appeal to the courts. Having said this much in favor of H.R 15119, it may strike some as mere nit-picking to call attention to some of its infirmatives or possible infirmitives. One of these at least in our view-is the provision-also contained in the administration's bill-making it apply to employers of one or more employees (present federal law applies only to those employers who have 4 or more workers in their employ in 20 weeks in a calendar year). Small business has enough trouble staying in business under the most favorable conditions. We do not think it will be helped any by imposing this additional burden and expense. The administration bill would have increased the taxable wage base from $3,000 under existing law to $6,600 by 1971. Under the House bill, the wage base is increased to $3,900 beginning in 1969 and to $4,200 beginning in 1970. In his dissenting views Representative Thomas B. Curtis (R. Mo.) said: "I think the financing of H.R. 15119 gives too much money to the federal administration under guidelines entirely too lose. Although I favor some increase in the tax base to facilitate a better experience rating system on the part of the states, the increase in the base provided by H.R. 15119 is entirely too much." We have no way of knowing whether Mr. Curtis' suspicion is well founded, but we hope this committee will find out. In conclusion, I wish to quote from a statement made by the Council to the House Ways and Means Committee last year: "I should like to reiterate and underscore what, to the Council at least, is by far the most cogent and, under existing circumstances, relevant argument that can be made against federalization of the unemployment insurance system. This is that the Federal Establishment is already too big and costly and cumbersome without adding anything to it. The concept-first enunciated in 1869 by the Supreme Court in the case of Texas vs. White, 7 Wall, 200—of an indestructible union of indestructible states is being eroded at an ever-accelerating rate at the expense of the states and the aggrandizement of the Central Government." Thank you. Hon. RUSSELL B. LONG, INTERNATIONAL CHEMICAL WORKERS UNION, Chairman, Committee on Finance, Washington, D.C. Akron, Ohio, July 21, 1966. DEAR SENATOR LONG: The chemical industries rapid implementation of automated production and other similar "labor savings" devices has created several serious adjustments and other work problems for many of our workers and their families. In recent years, we have been confronted with many thousands of cases of unemployment caused primarily by plant closings due to a variety of special circumstances. You are aware, I am certain, of the increasing industry trend toward closing organized plants in order to take advantage of lower taxes and cheaper labor to be found in other states. In most every case of resulting unemployment, the chief complaint from those who are affected by the shut down was one of inadequate compensation during the time they were actively pursuing other work. Our Union firmly believes the McCarthy Bill (S 1991) will do much to alleviate many of the difficulties experienced by the family bread winner who has lost his job through no fault of his own. Further, the bill will do much to restore the original principles of job insurance protection by emphasizing the need for uniform federal standards, both for the duration of their weekly benefits, plus a minimum of 26 weeks of federal unemployment compensation benefits. We are wholeheartedly in accord with both items and we also support the bill's attempt to broaden coverage to some five million more persons through the proposed small increase in the tax rate to pay for necessary implementation. I am most concerned that our position on the bill be recorded and ask that you have this letter printed in the record of the committee hearings. Sincerely yours, WALTER L. MITCHELL, President. STATEMENT OF CLIFFORD W. SHRADER, PRESIDENT, SOUTH DAKOTA STATE FEDERATION OF LABOR, AFL-CIO My name is Clifford W. Shrader and I am the President and Legislative Representative of the South Dakota State Federation of Labor AFL-CIO with offices located at 101 So. Fairfax Avenue, Sioux Falls, South Dakota. In addition, I am an employee representative of the Advisory Committee of the South Dakota Employment Security Department. The following statement is in support of unemployment compensation reform legislation patterned after the McCarthy bill, S. 1991, and it is respectfully requested that the statement be printed in the record of the Committee hearings. During he six years I have held my present position, and during the years I have been an officer of the South Dakota AFL-CIO, I have witnessed a gradual but steady deterioration of the unemployment insurance program in South Dakota as a result of an almost continuous attack against the program on the part of certain employer groups and individuals who proudly proclaim to be ultraconservative by nature and strongly opposed to any form of social legislation. Were it not for our efforts and the efforts of our friends, the unemployment insurance program in South Dakota would be even more inadequate than it is at the present time. To illustrate my assertion that the unemployment compensation program has been under severe attack in South Dakota, permit me to cite just a few cases which have occurred during my six years as a legislative representative for South Dakota organized labor: 1. Legislation was passed by the South Dakota Legislature designed to reduce the benefit amount of claimants with prior annual earnings of $6,000 or more. This was later held to be in non-compliance by Secretary of Labor Willard Wirtz. 2. The following session of the Legislature passed a bill designed to drastically reduce the benefits of some claimants and completely disquaify others by requiring that the claimants show proof of earnings in the corresponding calendar quarter of the prior year. We were able to defeat this measure on a referendum vote. 3. A bill to reduce the benefits of eligible claimants who left the state in search for employment was rejected by the Legislature, but only because they were fearful of a non-compliance ruling. 4. Although it had the support of the administration, a bill to require female workers who became pregnant to show proof of earnings equal to four times their weekly benefit before becoming eligible for unemployment compensation was rejected by the Legislature by a narrow margin. 5. Bills were passed by the Legislature drastically extending the disqualification periods of claimants who were deemed to have quit without just cause, discharged for just cause, etc., some disqualifications extending for the entire benefit year. 6. A Statement of Policy was issued to South Dakota employers on November 8, 1965 to the effect that retirees would no longer be considered as being on the labor market and consequently would not be considered eligible for unemployment benefits. This statement of policy was issued by the S. D. Employment Security Department and was withdrawn after we filed a strong protest to same. To further complicate our efforts to maintain a reasonably adequate unemploy ment insurance program in South Dakota, we have from time to time requested and received the assistance of the Employment Security Department in properly drafting legislative bills, only to have a high ranking official of the department make it a point to inform the legislators in advance of our proposals and recommend to those legislators that our proposed legislation be rejected or drastically reduced. Therefore, we not only must contend with the opposition of the employer groups and individuals mentioned earlier, but also the opposition of the administration and the Employment Security Department. The fact that it has almost become an impossibility to achieve improvements in the South Dakota unemployment insurance program is reflected by the $36 maximum weekly benefit provided and the maximum of 24 weeks of benefits in a benefit year. Only seven (7) states provide a lower maximum weekly benefit amount than South Dakota. and I believe only one other state restricts the maximum duration of weekly benefits to 24 weeks in benefit year with no provision for extensions. Time after time instances have been brought to our attention where claimants have been required to file for appeal hearings in cases where there seemed to be no justification for the claim to be held up, and in some cases where the local employment office found it difficult to understand the reason for the claims to be questioned. We have come to the conclusion that the delay in processing these claims which appear to be as clear-cut as claims can be with regard to eligibility and compliance constitute a deliberate attempt on the part of someone to make it as difficult as possible for a claimant to qualify for benefits they are entitled to. In a final analysis, and facing the situation squarely and honestly in South Dakota, neither the administration of South Dakota or the administrator of the South Dakota Unemployment Insurance Law are interested in the law being a good law. Their interest has been, and will continue to be, the lowest possible tax rates for the employers and the lowest possible benefits for the unemployed, and it is they and their kind that have promoted the passage of HR 15119 as a poor substitute for HR 8282 after their own indifference to adequate unemployment insurance laws has made it obvious that standards must be established and maintained by federal legislation. I am confident that I speak for the 17.000 union members in South Dakota and all of the working people in the state when I solicit your support of adequate unemployment compensation reform legislation designed to reinstate and maintain standards that are in keeping with the original concept of unemployment insurance. |