Unemployment Compensation

UNEMPLOYMENT COMPENSATION

TUESDAY, APRIL 7, 1959

HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, Washington, D.C.

The committee met at 10 a.m., pursuant to notice in room 1102, New House Office Building, Hon. Wilbur D. Mills (chairman) presiding. The CHAIRMAN. The committee will come to order.

We are today beginning 8 days of public hearings to receive views, recommendations, and suggestions of interested witnesses on the subject of Federal laws relating to unemployment compensation.

As indicated in the press release of March 10 announcing these hearings, there are a number of proposals pending before the Committee on Ways and Means on the subject of unemployment compensation. Among these proposals are bills to specify certain Federal standards, bills to redefine the term "employer" to include persons having one or more employees, bills to provide supplementary payments to distressed areas, and a number of other proposals.

Without objection a copy of the press release of March 10 will be placed in the record following this statement.

(The document referred to follows:)

CHAIRMAN WILBUR D. MILLS (DEMOCRAT, ARKANSAS), COMMITTEE ON WAYS AND MEANS, HOUSE OF REPRESENTATIVES, ANNOUNCES PUBLIC HEARINGS TO BE CONDUCTED BY THE COMMITTEE ON WAYS AND MEANS FOR THE PURPOSE OF RECEIVING VIEWS AND RECOMMENDATIONS RELATING TO THE SUBJECT OF UNEMPLOYMENT COMPENSATION, TO BEGIN ON APRIL 7, 1959

The Honorable Wilbur D. Mills (Democrat, Arkansas), chairman, Committee on Ways and Means, House of Representatives, today announced that the Committee on Ways and Means has scheduled general public hearings to begin April 7, 1959, for the purpose of receiving views, recommendations, and suggestions relating to provisions of Federal law on the subject of unemployment compensation. Chairman Mills stated that there are presently pending before the Committee on Ways and Means a number of legislative proposals for amendments to those titles of the Social Security Act relating to unemployment compensation and that, due to the interest which has been expressed in this subject, it has been concluded that public hearings should be conducted so as to afford interested individuals, groups, and organizations an opportunity to present their views.

Among the pending proposals on unemployment compensation are a number of bills relating to the specifying of certain Federal standards, redefining the term "employer" to include persons having one or more employees, bills to provide for supplementary payments for distressed areas, and a number of other proposals. Chairman Mills stated specifically that the hearings would be for the purpose of receiving comments relative to any of the legislative proposals pending before the Committee on this subject, and particularly such matters as the specifying of Federal standards, and so forth, as well as general recommendations relative to the adequacy of present law on this subject.

The chairman stated that the Secretary of Labor, the Honorable James P. Mitchell, will be invited as the first witness at these hearings, to appear on 1

April 7, to present any recommendations which the administration may have on the subject.

It was emphasized that the Committee on Ways and Means has a very heavy legislative schedule. With this in mind, Mr. Mills urged that all persons and groups with similar interests designate one spokesman to represent them. He stated that the time for each witness would be determined by the number of witnesses requesting to be heard. He pointed out that it would be necessary for persons requesting to appear and testify to indicate

(1) the particular subject, and/or pending legislative proposal, to which their testimony will be directed,

(2) the amount of time required for their direct testimony, and

(3) the name of the witness who will present the testimony for the organization or group concerned.

Persons who may be interested in appearing and testifying should submit their requests to the chief counsel, Committee on Ways and Means, 1102 New House Office Building, Washington, D.C., by not later than Thursday, March 26, 1959. All persons who desire to do so may submit a written statement in lieu of a personal appearance. Such statements will be considered by the committee and also printed in the record of the hearings. It is requested that persons who submit such statements in lieu of a personal appearance make the statements available by not later than Wednesday, April 15, 1959. A minimum of three copies of such statements should be submitted.

Persons who are scheduled to be heard are requested to submit 60 copies of their prepared statements 24 hours in advance of their scheduled appearance. If a witness desires to also make available copies of his statement for the press and interested public, an additional 50 copies should be submitted by the date of his appearance. Persons who submit a statement for the record in lieu of an appearance may also provide an additional 50 copies of their statement if they desire it to be made available to the press and the public.

The CHAIRMAN. I should like to express the appreciation of the committee and the staff to the many witnesses who have requested to be heard for their cooperation with the staff in arranging their appearances before the committee. It is realized that in many instances it has been difficult for a witness to accommodate himself to the schedule, but the very large number of requests to be heard combined with the limited time available to the committee for these hearings made it necessary for us to impose certain time limits.

As indicated in the press release of March 10, Secretary Mitchell was invited to be the first witness on this the opening day of the hearings. I regret exceedingly that Secretary Mitchell due to other commitments is unable to be here this morning, but I am pleased that the Department of Labor, for the administration, will be represented by the Under Secretary of Labor, the Honorable James T. O'Connell, accompanied by the Assistant Secretary of Labor, the Honorable Newell Brown, and also accompanied by Mr. Merrill Murray, who has worked with the committee on a number of occasions in the past.

Mr. Under Secretary, we are pleased to recognize you, sir, and you may proceed without interruption through the completion of your

statement.

STATEMENT OF THE UNDER SECRETARY OF LABOR, HON. JAMES T. O'CONNELL, ACCOMPANIED BY THE ASSISTANT SECRETARY OF LABOR, HON. NEWELL BROWN, AND MERRILL G. MURRAY, ASSISTANT TO THE DIRECTOR, BUREAU OF EMPLOYMENT SECURITY Mr. O'CONNELL. Mr. Chairman and members of the committee, I would like to open by expressing the regret of the Secretary that he could not personnally present this position. I wish to express my appreciation to the committee for the opportunity to present the ad

ministration's recommendations with respect to legislation for the improvement of the Federal-State employment security program. We are discussing measures to alleviate human suffering. Though there are now sound reasons for thinking that, nationally, unemployment will become less-not more of a problem in the next several months, we must recognize that there are still many people in this country who want to work and who cannot find a job.

Accordingly, it is important to examine first the nature of the problem. Then we can examine what can best be done to help unemployed workers.

Some unemployment remains across the country as the legacy of the recession. It tends increasingly to be localized, and many of these people will be back at work as production expands. There is every indication that reemployment will continue until there are around 67 million people employed in October; unemployment will then be down to about 3 million.

But pockets of unemployment will remain in some areas as a result of technological change and changes in our industrial geography: some industries are employing fewer people and others are moving. Against this background, let us examine our Federal-State unemployment insurance system. I want to point out that it is now one of the most important weapons we have for fighting recessions, and imperfect as it is, it meets the human needs of many families who may suffer from the results of economic dislocations for which they, as individuals, have no responsibility.

During the recession of last year, nearly 8 million people received one or more payments under State unemployment insurance programs and under the Federal employees' unemployment insurance program. These individuals received a total of $3.9 billion in benefits during the calendar year 1958. In addition, in 1958 approximately $311 million were paid out in benefits to unemployed Korean veterans and railroad workers. The total of $4.2 billion in benefits served to give substantial support to consumer expenditures in our economy.

I believe that no one would now seriously deny that the FederalState unemployment insurance program has effectively slowed the downward spiral of our economy during periods of increased unemployment. To a meaningful and significant extent, unemployment insurance benefits minimize the harsh consequences that stem from joblessness by enabling the unemployed worker to sustain himself and his family during such trying periods.

At present 44 million wage earners are covered by the FederalState program of unemployment insurance; another 1 million are covered by railroad unemployment insurance. Approximately 13 million are not covered by any program. The administration believes that it is now feasible to extend coverage to additional groups of workers. These include workers employed by small firms, nonprofit organizations, certain Federal instrumentalities and employees serving on American aircraft serving overseas.

We therefore recommend that the definition of "employer" in the Federal Unemployment Tax Act be amended to apply to all persons who employ one or more individuals in the type of services covered. by the act. This change would result in extending the protection of the unemployment insurance programs to about 1.9 million individ