Page images
PDF
EPUB

Furthermore, the benefit standards set are so high as to encourage a worker to become unemployed because he could make almost as much money not working as he could working. For example, if a worker with a family of four earned $80 a week, his take-home pay after income tax and social security were deducted would be $72.80. His unemployment benefits as proposed by this bill would be $53.32, tax free. In our State, he could earn up to $12 a week without losing any benefits so this would increase his weekly spendable income to $65.32. The difference between $72.80 and $65.32 could easily be used up in additional expenses when working such as transportation to work, lunches, union dues, etc.

Passage of this bill would destroy present State systems of employer experience ratings a device which provides tax incentives to employers who stabilize jobs. This would be a step backward.

Yours truly,

Hon. WILBUR MILLS,

Chairman, House Ways and Means Committee,
House of Representatives, Washington, D.C.

F. W. SHIELDS, Jr.

HOUSE OF REPRESENTATIVES, Washington, D.C., April 14, 1959.

DEAR MR. CHAIRMAN: Mr. Thomas A. Kirkwood, of Norwalk, Conn., a constituent of mine, has written me regarding H.R. 3547, the unemployment compensation bill now being considered by your committee.

Mr. Kirkwood's letter is attached and I would appreciate his views being made available to the entire committee and also made a part of the official hearing record on this legislation.

Sincerely,

DONALD J. IRWIN,
Member of Congress.

EDWARDS Co., INC.,

Norwalk, Conn., April 6, 1959.

Hon. DONALD J. IRWIN,

House of Representatives,

Washington, D.C.

DEAR DON: I am writing you concerning the unemployment compensation hearings that are starting April 7. I refer to the Karsten-Kennedy bill, H.R. 3547-S. 791.

I do not believe that the best interest of the employee, or the public, and I know, the best interest of the employer, is not served by this legislation.

There are many provisions in the bill that are not sound, but I will point out only three: First, the federalization of the State unemployment compensation programs; second, the abolishment of merit rating; and third, the extreme liberalization of the benefit program.

As to federalization, unemployment compensation is a State problem and has been very successfully handled at the State level. The citizens of the State best know and can decide what kind of a program is needed. ment to the governed, the better the government from the governed's view. Let The closer the governthe States run their own business.

Merit rating is a reward and an incentive to the employer to stabilize employment, to wipe out the peaks and valleys. To the degree an employer stabilizes his employment, he lowers his unemployment compensation rate, because he is reducing unemployment. Merit rating is in practically all of the State unemployment compensation programs, and has been for a long time. sound, I am sure it would have been discontinued by the States, so why change? If it were not The scale of benefits in the Karsten-Kennedy bill far exceeds the highest in effect in any State and the duration of payments is also greater. This could create a situation where a man could work no more than 4 months and earn about $1,000, then draw as much as $1,350 in the next 9 months. mated that in our company, here in Connecticut (which State is tops in beneI have estifits), if this bill is enacted our unemployment tax bill would jump from about $17,000 to about $42,000 annually-quite a jump.

These changes, I am sure you realize, are very inflationary and certainly anything that can be done to curtail the depreciation of the dollar should be done.

I am sorry that I didn't see you when you were home for Easter, but I did hear part of a broadcast you made on Sunday, the 5th. I was returning from Massachusetts yesterday and was up near Sommers or Rockville, Conn., and turned on the car radio and who did I get? Congressman Irwin of the fourth, and in the Hartford Congressional District. You cover a lot of area.

Regards,

T. A. KIRKWOOD.

NORTH CAROLINA TEXTILE MANUFACTURERS ASSOCIATION, INC.,
Charlotte, N.C., April 9, 1959.

Congressman WILBUR D. MILLS,

Chairman, House Ways and Means Committee,
House Office Building,

Washington, D.C.

DEAR CONGRESSMAN MILLS: Our association represents the textile manufacturing industry in North Carolina, an industry which comprises nearly half of the total manufacturing within this State and which employs some 217,000 North Carolina workers.

Speaking for this industry, we respectfully request that this letter be made a part of the official record in connection with the public hearings your committee is conducting on various unemployment compensation bills.

We are completely opposed to the federalization of the unemployment compensation program in any degree whatsoever. It is our feeling that any legislation which would establish Federal minimum benefit standards and which would compel the States to take similar action, would deprive the North Carolina Legislature of its rightful authority in such matters.

Industry in North Carolina takes pride in its sound unemployment compensation fund and in the manner in which the program is administered by the State. And we respectfully suggest that our own State government is better equipped to know, understand and meet our own unemployment compensation problems than would an agency geographically removed.

We believe that our experience rating plan and procedures is sound and that it has been accorded judicious handling. We will do all within our power to preserve it. And, therefore, we strongly oppose any plan which would extend the wage base on which the unemployment tax is now paid. Obviously, any effort to increase the present wage base from the first $3,000 of earnings to the first $4,200 of earnings of an employee would undermine experience rating. Annual wages would be smallest in industries where there is heaviest unemployment. Conversely, they would be highest in industries which have stabilized employment to the highest degree possible, consistent with economic conditions. Broadening the wage base would, therefore, impose a penalty on those who have been most consistently endeavoring to stabilize employment.

Recognizing the seriousness of any movement to federalize unemployment compensation administration, there has just been introduced in the General Assembly of North Carolina a joint resolution opposing federalization. The resolution embodies a provision expressing the dedication of the people of our State to the proposition that matters relating to the amount and duration of unemployment insurance payments should be left to the discretion of the State governments because of the widely varying economic and other conditions which exist among the States.

We strongly urge that the present tax base of $3,000 in wages be left unchanged, so that experience rating in our State will not be weakened and possibly destroyed. With all the emphasis at our command, we register our opposition to the federalization of the unemployment insurance program in any

manner.

We have the deep and abiding conviction that these are State matters, and as such, should remain under State control.

Respectfully,

W. C. CANNON, President.

ALABAMA TEXTILE MANUFACTURERS ASSOCIATION, INC.,

Lanett, Ala., April 1, 1959.

Congressman WILBUR D. MILLS,

Chairman, House Ways and Means Committee,
House Office Building, Washington, D.C.:

Congressman Mills, according to press reports from Washington, your committee will begin, on April 7, 1959, public hearings on a series of bills concerning various phases of unemployment compensation.

We wish to express the views of the Alabama textile industry on the subject, and request that this letter be made a part of the official record.

Some of the proposed changes cause much concern to those of us who constitute the management of an industry presently employing 42,200 Alabama workers. (This is the latest employment figure released by the State of Alabama, Department of Industrial Relations, for January 1959.)

Primarily, we wish to register our complete opposition to federalization of the unemployment compensation program in any degree. There are sound reasons for such a positive stand. People are not, and cannot be, standardized. Conditions of employment are also involved and complex, and cannot be standardized.

Amounts and duration of benefits are matters that can be understood only by State legislatures, which are close to their people and their problems. in neighboring States there are often major differences.

Even

In Alabama we have a sound fund and an excellent administration of our unemployment compensation program. In legislative matters we have evolved a method of handling that works. All bills pertaining to unemployment compensation are sent to one specific committee, and there referred to a special subcommittee, whose members have more knowledge of the complex subject than the full committee.

Over a period of time, during the Alabama legislative session, representatives of industry and labor meet with officials of our department of industrial relations and study the proposals together. From these meetings evolve agreements that the special subcommittee of the legislature uses to shape the bills presented and it practically always is this agreed legislation that is passedbecause there has been a meeting of minds and an understanding of our own conditions.

Under any federalization of unemployment compensation matters this democratic procedure would be completely abrogated.

Experience rating is a phase of unemployment compensation that has been very wisely handled in Alabama, and we are positive and determined-insofar as we can do so to see that the purpose and original agreements of experience rating are continued.

For example: We understand that the administration plans to advocate extension of the wage base on which the unemployment tax is now paid from the present first $3,000 of wages paid to $4,200 of wages paid to each employee. Anyone can see, without being a seventh son, that this would be a backward step in experience rating. Annual wages would be the smallest in industries where there is heaviest unemployment. They would be highest in industries which have followed good experience rating programs and maintained the best employment stabilization possible under economic conditions.

To broaden the base would make it a penalty to continue efforts to stabilize employment and would offer a premium to those least interested in employment stabilization.

That is why we feel broadening the base would be a definite backward step. It would also be a complete reversal of the basic premise upon which our State government sought and gained industrial backing which led to installing the unemployment compensation program in Alabama. We have been intimately connected and concerned with the subject since it was first proposed, during the administration of Gov. Frank M. Dixon.

We urgently request that the Federal Government see the wisdom of leaving control of the unemployment compensation program in the hands of State legislatures, practically all of which are now meeting or will be meeting soon.

We are emphatic in registering opposition to any proposal to federalize the unemployment compensation program in any way, because it is achieving its best results under State control, for it is the nature of this human subject that local control and administration will always provide the best human results.

[ocr errors]

We strongly advocate that the present tax base of $3,000 in wages be left unchanged, so that true experience rating will continue. This will continue to help achieve the original objective of stabilization of employment. To broaden the base is to offer a premium for nonstabilization. That is the opposite of the original idea underlying experience rating.

In final summary, we offer these views because we are convinced that they are in the best interest of our workers in Alabama who are covered within the present unemployment compensation program.

We request that these views be made a part of the official proceedings of the public hearings, and we shall appreciate your courtesy in so doing.

E. R. LEHMANN, President.

THE AMERICAN COTTON MANUFACTURERS INSTITUTE, INC.,
Washington, D.C., April 17, 1959.

Hon. WILBUR D. MILLS,

Chairman, Ways and Means Committee,
House of Representatives,

Washington, D.C.

DEAR MR. MILLS: We are submitting herewith a resolution on unemployment compensation which was adopted by the board of directors of the American Cotton Manufacturers Institute on March 18, 1959. It will be appreciated very much if you will have the resolution incorporated as part of the record in connection with the hearings your committee has held on this legislation.

The resolution is filed on behalf of the American Cotton Manufacturers Institute, which has its headquarters in Charlotte, N.C., and other offices in New York, Clemson, S.C., and Washington, D.C. The institute is the central trade association for manufacturers of textiles from cotton, manmade fibers, and silk. Our concern as a trade organization and as an industry, therefore, includes the fibers which account for 93.8 percent of total fiber and filament consumption in this country.

Our organization represents about 80 percent of the spindles and looms in the industry, which has a normal employment of approximately 1 million men and

women.

The enactment of the proposed legislation, H.R. 3548, would completely upset the present pattern of unemployment compensation insurance. Therefore we hope that you and the committee will not take action contrary to the position of ACMI expressed in the resolution.

Sincerely yours,

JAMES A. CHAPMAN, President.

A RESOLUTION-UNEMPLOYMENT COMPENSATION

Whereas the Federal Temporary Unemployment Compensation Act of 1958 has led to a depletion of the unemployment compensation tax reserves in many States and tends to encourage a dole system; and

Whereas, the Kennedy bill, S. 791, and a number of companion bills introduced in the House of Representatives will result in expanding the harmful effects of the act of 1958, including large increases in the maximum weekly benefits, lengthening the payment periods, decreasing the requirements for eligibility of claimants, likely destruction of the merit rating provisions in the different State laws, will endanger the welfare of deserving employers and deserving employees and generally will lead to the establishment of a dole system with all of its disastrous results; now therefore,

The Board of Directors of the American Cotton Manufacturers Institute urge the Congress to permit the Temporary Unemployment Compensation Act of 1958 to terminate and end on April 1, 1959, without extension; and further urge that the administration of unemployment compensation programs shall be left with the different States under the provisions of Federal legislation existing prior to 1958, with such amendments to the State laws and programs as have been adopted or may hereafter be adopted by the several States.

And further resolved, That the members of our institute should acquaint themselves with the dangers of the proposed Kennedy and companion bills and they are urged to communicate their views on these measures to their respective Senators and Congressmen.

STATEMENT OF THE AMERICAN FARM BUREAU FEDERATION ON AMENDMENTS TO UNEMPLOYMENT COMPENSATION LAWS AND IMPOSITION OF FEDERAL STANDARDS

The pending legislative proposals to establish certain Federal standards in the administration of unemployment compensation should not be enacted.

The existing program, designed to aid in the relief of temporary involuntary unemployment is essentially a State-operated program. State legislatures, in developing the State programs, have designed them in the main to meet local conditions. In discharging this responsibility there is much evidence that individual States have pioneered the enactment of new provisions, which having been proved satisfactory under trial, have been adopted by other States. We believe the opportunity for development of policies and administrative techniques at the State level represents one of the sound features of the prevailing program. The enactment of Federal standards would greatly weaken if not actually destroy this feature.

State government has not been too late with too little in this field. It is reported that: (1) The weekly benefit amount has increased faster than the cost of living than the average weekly benefits now buy about 40 percent more goods than the benefits of 1939; (2) duration of benefits has increased substantially; the total real protection provided by the program has nearly doubled; (3) the waiting period before starting to draw benefits has been steadily shortened. Compared with 1939, when a 3-week period was common, no State now requires more than 1 week and 5 States require no waiting period at all. In short, a claimant today, compared with 1939, starts receiving benefits more quickly, gets them for a longer period, and can buy more real goods with them.

The American Farm Bureau Federation favors decentralization of responsibility to the greatest extent possible as indicated in the following resolution : "We favor increased emphasis on the assumption of responsibility by States and local units of government for the exercise of their appropriate functions. Proper public functions should be performed by that division of government closest to the people which can administer them effectively.”

We believe the imposition of Federal standards is undesirable in that it represents a departure from a policy of a generation, which, once it is broken, will lead to an ever-continuous invasion by the Federal Government of this domain. The Federal system of government has done too much for America to place it in a position to be weakened through assumption at the national level of responsibility for functions now being carried on at the State level. We recommend no action be taken on the pending bills.

We respectfully request this statement be incorporated in your hearing record.

STATEMENT ON FEDERALIZATION OF STATE UNEMPLOYMENT COMPENSATION BY THE CONFERENCE OF STATE MANUFACTURERS' ASSOCIATIONS

The Conference of State Manufacturers' Associations, composed of State associations of manufacturers, appreciates the opportunity to express its opposition to federalization of the unemployment compensation systems of the States. The State associations joining in this statement are:

Associated Industries of Alabama

Associated Industries of Arkansas, Inc.

California Manufacturers Association

Manufacturers Association of Colorado

Manufacturers Association of Connecticut, Inc.
Associated Industries of Florida
Associated Industries of Georgia
Illinois Manufacturers Association
Indiana Manufacturers Association
Iowa Manufacturers Association

Associated Industries of Kansas, Inc.
Associated Industries of Kentucky
Louisiana Manufacturers Association

Associated Industries of Maine

Associated Industries of Massachusetts

Michigan Manufacturers Association

Minnesota Employers Association

« PreviousContinue »